Tobacco exports earn US$564.07m | Business Times

LIVINGSTONE MARUFU

 

Zimbabwe has earned  about US$564.07m from tobacco exports  in the first eight months of this year, reflecting a 24.35% increase from US$453.6m made  in the prior comparative period.

Tobacco deliveries this week increased  by 43.21% to 295.67m kilogrammes  (kg) from 206.466m kg delivered during the same period last year.

“The country has exported 111.21m kilogrammes to more than 40 countries earning US$564.07m as of August 28, 2023   while 98.979m kg were exported  with a value of US$453.6m during the same period in 2022. This year tobacco is being exported at an average price of US$5.07/kg from US$4.60/kg,” reads part of the Tobacco Industry and Marketing Board (TIMB) report released this week.

Today, TIMB will wrap up the mop-up sales, and  the output is expected to go beyond 296m kg.

The government anticipates tobacco export revenue to reach US$1.6bn, up from US$991m earned last year as a result of the record production of golden leaf.

The increase in output, according to TIMB board chairman Patrick Devenish (pictured), can be attributed to small-scale growers’ high levels of tobacco-growing expertise and favorable rainfall patterns.

After the land reform program, many communal farmers entered the lucrative farming sector, making Zimbabwe the largest producer of flue-cured tobacco in Africa and the fifth-ranked country in the world.

This year 148,527 farmers grew tobacco, up from 122,841 last year, according to TIMB figures.

The board reported that the area increased from 110,155 to 117, 928 hectares. Experts claim that droughts and the effects of climate change have forced buyers to make firm offers on the nation’s tobacco that is flue-cured.

Zimbabwe, however, continues to face significant difficulties as there are worries that the tobacco industry, which  is losing  a huge chunk of  profits to offshore lenders, is causing the nation to lose a significant portion of its value.

The government is worried that the nation is losing value because 98% of the tobacco is exported in a semi-processed state, which means that the nation is exporting both value and jobs.

The Reserve Bank of Zimbabwe has removed limitations on the use of locally sourced funds to help the nation’s tobacco production this year.

“In terms of Section 4 of the Exchange Control [Tobacco Finance] Order, Statutory Instrument 61 of 2004, tobacco merchants are required to source offshore financing to produce and buy back green leaf tobacco.

“Tobacco merchants who fail to secure offshore financing are required to apply to the bank (RBZ) for authority to raise funds on the local market. Considering this development, the Exchange Control [Tobacco Finance] Order,Statutory Instrument 61 of 2004 shall be amended to take account of this change,” RBZ governor John Mangudya  said in his mid-term Monetary Policy Statement.

 

Related