Tobacco could hit 200m kg
TOBACCO production could reach 200 million kilogrammes from the 186 million kilogrammes recorded last year, Ethical Leaf Tobacco managing director Doesmatter Muvimbi has said.
Speaking at The Financial Gazette Executive Dialogue last Friday, Muvimbi said this year’s leaf tonnage could be higher than last year’s despite slow deliveries so far.
“It promises to be 180 million kg this season, on the outside we expect 200 million kg. But what we have seen so far is that we are comfortable to talk about that (180 million) figure,” he said.
Tobacco is the second largest foreign currency earner after gold.
“The season started off well, volumes are promising although we are 10 percent off from where we were last year; because of the late rains, farmers are still busy harvesting. We anticipate improved volume as the season progresses because a lot of our farmers were affected by the late rains,” said Muvimbi.
The 2018 tobacco marketing season officially opened on March 21 at the Tobacco Sales Floor, with a starting price of $4,90 per kg, up from last year’s $4,60 per kg.
Although the opening price was a disappointment to farmers who expected it to breach the prevailing $4,99 per kg auction price to hit $5, expectations were still high that prices would firm as the selling season progresses on the back of a quality crop and good rains received during the second half of the agricultural season.
The average price this year is currently at $2,88, up from $2 the past two years.
Muvimbi said the biggest challenge facing indigenous farmers was access to cheaper nostro funds for importing raw materials for the manufacture of fertilisers, which would guarantee cheaper inputs.
“All aspects of the tobacco industry must be centred around the viability of the farmer for it to be sustainable. Harsh lessons drawn from the collapse of the cotton industry point to the fact that ignoring the farmer’s viability issues for short-term profit can only lead to our own demise in the medium-term,” he said.
Ethical Leaf Tobacco, the trading name of Public Benefit Investments (Private) Limited, a Zimbabwean indigenous company, made its debut on the tobacco calendar in the 2016/17 season when it supported over 5 000 growers to produce five million kg of the golden leaf, becoming the biggest indigenous tobacco contract growing firm by market share.
“In addition, the memorandum of deposits arrangement for buying green tobacco should be extended to indigenous tobacco merchants to increase their participation as earnings and dividends accruing to them are 100 percent repatriated and domiciled at home for the benefit of the local economy,” Muvimbi said.
The Tobacco Industry Marketing Board has licensed 23 contractors and three auction floors to operate during the 2018 marketing season.