HomePoliticsTobacco sold less than half last year's

Tobacco sold less than half last year’s

Staff Writer

DESPITE the rosy picture being painted that Zimbabwe’s tobacco earnings and production levels would shatter long-standing records, boosting the ailing economy, tobacco sales on all three auction

floors ended with 80,2 million kilogrammes of leaf, less than half last year’s 166 million kg.

This year’s tobacco crop – nearly all of it exported – earned the country about US$179 million.

In 2000 Zimbabwe sold 236 million kg of tobacco, which is more than three times that sold this year.

Zimbabwe has three main auction floors – the Tobacco Sales Floor (TSF), Zimbabwe Indigenous Tobacco Auction Centre (Zitac), and Burley Marketing Zimbabwe Ltd (BMZ).

Tobacco accounts for at least 35% of Zimbabwe’s total foreign currency earnings, and in normal seasons, bails government out of much-needed hard currency crunch.

The official tobacco selling season ended on Friday last week, but had to be extended to Monday to cater for those farmers who had failed to send their tobacco through the system.

Clean up sales are however scheduled for October 31 when the curtain comes down on the tobacco selling season – arguably the worst for Zimbabwe’s farmers since independence.

The Zimbabwe Tobacco Association, which represents growers, is forecasting a crop next year of 60 million kg, but officials admit it could drop to 40 million kg.

“We continue to keep our fingers crossed and hope for the best during the clean up sale scheduled for month-end,” a TSF official said.

Tobacco sales through the TSF began on April 23, but at a slow pace. Deliveries only picked up meaningfully in the last week of May but began to peter out after as farmers wrangled with government over a higher exchange rate.

The farmers cried foul over the $824 government was giving them for the United States greenback, arguing the currency was fetching as much as $6 000 on the parallel market.

Tobacco farmers are paid in US dollars but are given the Zimbabwe dollar equivalent in an arrangement with the Reserve Bank of Zimbabwe.

The farmers said inputs, fertiliser and transport costs had shot up due to the country’s hyperinflationary environment, leaving them cash-strapped.

TSL predicted that tobacco production levels would not notch the 110 million kg regularly dished out to the public and international community by government officials when the season began. In its results for the year ended April 30, TSL said urgent steps would have to be made to revitalise tobacco production over the next few months.

“Latest estimates of this year’s tobacco crop indicate a volume of approximately 80 million kilogrammes, less than half of last year’s production,” TSL said then. “The prospects for next year’s crop are similarly poor. However, TSL is pursuing strategies to stimulate tobacco production.

A successful outcome will obviously have a major beneficial impact on the fortunes of many group companies.”

The Reserve Bank of Zimbabwe (RBZ), which monitors actual tobacco production and earnings instead of “official estimates” recently revealed that as compared to the same period in August 2002 the tobacco mass sold and earnings decreased by 36 million kg and US$73 million, respectively.

Analysts, including the ZTA, said the figures for the coming season could be worse judging from low production levels being experienced. They pointed out that most of the crop that was delivered to the auction floors had been produced by commercial farmers who had now quit Zimbabwe.

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