Zim tobacco output rebounds

Source: Zim tobacco output rebounds – DailyNews Live

STAFF WRITER      15 May 2017

HARARE – Zimbabwe’s tobacco production has so far outpaced the previous
year by most measures including volume and value sold.

Production and sales of tobacco rose from 66,8million kg in the prior
season to 87,9 million kg as at day 32 of the marketing season following
last year’s devastating drought that has left 4 million people facing
hunger.

Statistics from industry regulator Tobacco Industry and Marketing Board
(TIMB) showed that farmers had sold tobacco worth $244,7m, up 29 percent
against $189,7m during the same period last season at the country’s
auctions and to official tobacco buyers since the selling season started
in March 15.

The outperformance, which is projected to prevail throughout the selling
season, is driven by a better crop following an improvement in average
rainfall, increased hectarage and funding.

Small-scale farmers have led the rebound, aided by the use of stable
foreign currencies adopted by the government to replace a local unit
destroyed by hyperinflation, and funding from China – which now dominates
a market previously controlled by Western merchants.

TIMB, which regulates the sector in Zimbabwe, said new growers increased
by 90 percent from 9 842 in 2016 to 18 743 in 2017 while total
registration stands at 96 327 farmers, a 23 percent increase compared to
previous season.

Thousands of mostly small-scale black farmers have taken over production
of the bulk of the crop, once the preserve of white commercial farmers.

Vice President Emmerson Mnangagwa said in a public lecture on command
agriculture at the Midlands State University in Gweru last week that black
tobacco farmers “are now producing more of the golden leaf than the white
commercial farmers during the colonial-era regime”.

“When we took the land, taking it back to its rightful owners, tobacco
production went down below 50 million kg… Now we are above 222 million
kg of tobacco a year,” Mnangagwa said, adding the country had recovered
and surpassed the 200 million kg which the white farmers used to produce.

TIMB said exports are 9 percent higher than the same period in the
previous year at 45,6million kg compared to 41,6 million kgs last year.

The 2017 export revenue of $214,7 million is however 11 percent below last
year  at $4,71/kg against $5,84/kg.

TIMB said while the e-marketing system has stabilised, there is still need
to increase the speed of the bidding process and user-training, while on
the downside, cash challenges continue as some banks are failing to meet
the withdrawal limits set by the Reserve Bamk of Zimbabwe.

Farmers have engaged police in running battles after protesting that they
are spending weeks at auction floors as banks are struggling to provide
cash as a liquidity crunch intensifies amid surging demand for cash.

The government directive, instructing tobacco farmers to open bank
accounts whilst doing away with spot payments at the auction floors, has
been a disaster, since banks are not issuing out the stipulated $1 000 for
the initial sale.

The country is facing an acute shortage of foreign currency which has
ruined industrial operations and disrupted the import of raw materials and
other critical products like drugs.