Tobacco farmers pocket US$894 million

Agriculture Reporter

DAY 106 of the 2023 tobacco marketing season saw farmers of the golden leaf walking away with US$894 million in earnings after selling 295 million kilogrammes of tobacco compared to the US$629 million generated from the sale of 293 million kilogrammes of the crop during the same period last year.

This represents a 43, 53 percent change in volumes traded and 42, 06 percent difference in earnings respectively.

Statistics from the Tobacco Industry and Marketing Board (TIMB) show that by Day 106 farmers who produced the crop under contract had sold 275 million kilogrammes of the flue- cured tobacco valued at US$837 million while their auction counterparts had traded 20 million kilogrammes with a value of US$57 million.

TIMB indicated that the average price per kilogramme on at the auction floors was US$2, 86 whilst on contract was US$3, 04.

There has been a decrease in the average price of the golden leaf with US$3, 03 being recorded compared to US$3, 06 fetched last year.

The highest price recorded at both contract and auction floors was US$6, 10 against US$6, 80 recorded during the same period last year. The US$6, 10 was recorded at the contract floors while the auction floors had to contend with US$4, 99.

To run away from the high costs of production, most farmers have since turned to contract farming, which now accounts for at least 93 percent of the country’s tobacco. This year farmers were getting 85 percent of their earnings in United States dollars and the remaining 15 percent in local currency at the prevailing interbank exchange rate.

Although the 2023 tobacco marketing season officially ended on July 31, contract sales are continuing until such a time when contractors have fully received all their tobacco. Outstanding deliveries on the auction side will be sold during mop up sales to be conducted on August 30, 2023.

The 2023 tobacco marketing season opened its doors on March 8 this year and delivered over 295 million kilogrammes of tobacco, making it the highest ever recorded in the country and just a few millions shy of the 300 million target the country has set for 2025.

Most of the country’s tobacco is exported to countries like China and Indonesia who constitute the main buyers of the product.