Global Demand A Boost For Tobacco Farmers

Yeukai Chidemo

3 years ago

The rising global demand for flue-cured tobacco has buoyed the firming of local golden leaf prices this season compared to last year.

According to latest figures from a Germany company specialising in market and consumer data, Statista, Zimbabwe is one of the top four producers of tobacco in the world after China, India and Brazil.

According to statistics from the Tobacco Industry Marketing Board, as of day four of sales, average price firmed 10% at US$2,66 this season from last year’s US$2,43.

Tobacco valued at US$11,75 million was delivered in the first four days of the season.

However, this is 21% lower than US$14,9 million realised in the same period last year.

Zimbabwe Tobacco Association chief executive officer Rodney Ambrose told a local paper that the strong world demand for tobacco was pushing prices northwards.

“The season has started on a good note with the average price up 11% on last season and we anticipate a further firming up of the market as volumes increase and higher qualities and styles of tobacco are delivered. The higher prices will be primarily driven by strong world demand,” Ambrose said.

“Growers on contract will start accessing their full 75% retention once they have repaid their contractors’ loans. At present, there are no major issues with regards to sales proceeds.”

Reserve Bank of Zimbabwe governor John Mangudya increased farmers’ retention threshold to 75% from last year’s 60%.

This means farmers will receive 75% of their earnings in foreign currency, with 25% being paid in the Zimbabwe dollar, converted at the prevailing official exchange rate.