Category: Leaf

  • Zimbabwean Growers Poised to Start Planting

    Zimbabwean Growers Poised to Start Planting

    Photo: YanaKho

    Zimbabwean farmers will start planting next year’s tobacco crop starting early next month, reports The Herald.

    Both irrigated and dryland tobacco farmers are preparing to transplant their seedlings from the seedbeds to the field.

    The irrigation tobacco is set to begin transplanting Sept. 1, while the rain-fed crop will be transplanted mid-October.

    “Preparations to plant irrigation tobacco are now at an advanced stage and farmers have enough equipment and water to ensure the success of the crop, said Tobacco Farmers Union Trust President Victor Mariranyika, who urged farmers to expand their hectarage.

    Zimbabwean tobacco farmers sold 295 million kg for $895million this marketing season, compared to 206 million kg for $630 million last year.

    The government aims to create a $5 billion tobacco industry by 2025 through its Tobacco Value Chain Transformation Plan, which calls for more leaf production, greater value addition and localized funding, among other objectives.

  • Zimbabwe Leaf Sales Touch $900 Million

    Zimbabwe Leaf Sales Touch $900 Million

    Anxious Masuka | Photo: Taco Tuinstra

    Zimbabwe has earned nearly $900 million from tobacco sales this season, reports New Zimbabwe, citing a government statement dated Aug. 21.

    “Cabinet is pleased to advise that the total tobacco production now stands at a phenomenal 295,499,782 kg, valued at $895,114,791,” said Lands and Agriculture Minister Anxious Masuka.

    “Of special note is the fact that 52 percent of the total production came from A1 and A2 farmers, confirming that the land reform program has been a success,” he said.

    In the early 2000s, Zimbabwe confiscated large-scale and mostly white-owned tobacco farms and redistributed them among landless peasants.

    The tobacco crop grew despite increased fertilizer prices caused by the war in Ukraine.  

    Tobacco in Zimbabwe has been on a rebound after production plummeted from a high of about 240 million kg  in 1998 to less than 50 million kg a decade later.

    Through the Tobacco Value Chain Transformation Plan, the southern African country has been working to make its tobacco industry more lucrative by manufacturing more cigarettes at home and limiting foreign funding of farmers.

  • Zimbabwe Moving Up Value Chain

    Zimbabwe Moving Up Value Chain

    Photo: Taco Tuinstra

    Zimbabwe is making steady progress toward achieving the goals set out in the government’s Tobacco Value Chain Transformation Plan (TVCTP), reports The Herald.

    Cigarette exports jumped to $47 million in the first half of this year, up 70 percent from the corresponding period in 2022, according to the Zimbabwe National Statistics Agency (ZimStats).

    The country’s tobacco product export earnings rose 19 percent from $378 million over the period January to June 2022 to $450 million over the same period this year.

    The country exports partly or wholly stemmed/stripped or not stemmed/stripped tobacco, tobacco refuse, cigars, cheroots and cigarillos tobacco, cigarettes and manufactured tobacco.

    The portion of tobacco product exports accounted for by partly or wholly stemmed/stripped tobacco decreased from 91 percent in 2022 to 88 percent this year.

    This was simultaneously accompanied by a three percent increase in the portion of export of cigarettes containing tobacco from seven percent last year to 10 this year.

    Tobacco Farmers Union Trust President Victor Mariranyika welcomed the increase in value- added tobacco products export.

    “We encourage exporters to increase value addition of our raw tobacco from the low figure of 2 percent until as a country we reach 30 percent,” he was quoted as saying. “Though this increase may not have an immediate impact on the farmer, it is a positive step in the right direction.”

    Zimbabwe Tobacco Growers Association (ZTGA) Chairman George Seremwe said if the country maintains this trajectory, then the benefits will eventually improve farmers’ livelihoods and the economy at large.

    The TVCTP aims to achieve a $5 billion tobacco industry by 2025.

  • Malawi Regulator Satisfied With Prices

    Malawi Regulator Satisfied With Prices

    Photo: Taco Tuinstra

    Malawi’s Tobacco Commission (TC) is satisfied with the prices that buyers offered in the 2023 tobacco marketing season, reports Malawi24. The regulator hopes the prices will motivate farmers to grow more tobacco next season

    “This year’s trade demand was at 170 million kilograms and we have supplied 120 million, which means there is a great market opportunity at our disposal,” TC Board Chair Godfrey Chapola was quoted as saying. “One of our strategic goals for the next five years is to raise our annual production to 200 million kilograms.”

    The TC will also be pushing to increase scale and irrigation in tobacco farming over the next five years.

    Chapola said proposed tobacco legislation currently being considered in Parliament would create a more conducive environment for all players and ensure that tobacco remains a strategic crop for Malawi.

    During the 2023 tobacco marketing season, Malawi earned $282.62 million after selling more than 120 million kg of tobacco at an average price of $2.35.

  • Zim Drops Offshore Funding Requirement

    Zim Drops Offshore Funding Requirement

    Photo: Taco Tuinstra

    Tobacco merchants operating in Zimbabwe will no longer have to source offshore the financing to support the production and buying of green leaf from contracted farmers, reports The Herald, citing an announcement by Reserve Bank of Zimbabwe (RBZ) Governor John Mangudya.

    The change is expected to boost funding of tobacco using local money and is in line with the Tobacco Value Chain Transformation Plan, which seeks to raise localization of tobacco funding to 70 percent by 2025 to keep more value in Zimbabwe.

    Previously, merchants who failed to secure offshore financing were required to apply to the RBZ for authority to raise money on the local market.

    Currently About 95 percent of Zimbabwean tobacco production is financed using offshore loans under contract farming. The offshore pre-financing arrangement means tobacco merchants bring into the country part of export proceeds in the form of inputs. After exports, the bulk of the export proceeds are used to pay offshore loans.

    However, some stakeholders in the industry suspect the costs of inputs have in many cases been inflated, increasing foreign obligation and reducing export earnings.

    Indigenous merchants welcomed the RZB move. “This makes life easier for local merchants,” an executive with a local tobacco company was quoted as saying. “Seeking a special dispensation from the central bank to source local funding created a regulatory impediment for local players to jump through.

    Terrence Ngarwe, a Harare-based agriculture economist, said the new policy measure would see the country retaining more value from tobacco. “By having tobacco funded with local money, it means more money stays in the country,” said Ngarwe.

    While Zimbabwe Farmers Union Executive Director Paul Zakariya applauded the new rules, he urged the industry to move away from contract farming and boost the domestic processing and manufacturing capacity.

    “The financing mechanism through contract is not viable even if we are to fund tobacco using local money,” said Zakariya. “We need to alter the whole production environment to an extent that farmers can be self-financed and get loans from the banks and sell tobacco at the auction.”

     Zimbabwe produced a record 295 million kg of tobacco this season, due to favorable weather conditions, improved agronomic practices and better funding packages by merchants, according to the Tobacco Industry and Marketing Board.

  • KT&G Helps Harvest Tobacco

    KT&G Helps Harvest Tobacco

    Image: KT&G

    KT&G volunteers helped farmers in South Korea’s Chungnam Province harvest tobacco.

    The cultivation of leaf tobacco takes place in July and August. The work is mostly performed by hand, resulting in a high labor intensity due to the difficulty of mechanization. Tobacco farming communities struggle to secure labor due to continuous rural depopulation and aging issues.

    To help farmers struggling with labor shortages, KT&G has visited leaf tobacco farms every year since 2007. Earlier this year, KT&G volunteers assisted farmers with the transplanting of tobacco seedlings.

    Additionally, KT&G supports the welfare of domestic tobacco farmers. In June, the company provided over KRW520 million ($396,657) in financial aid to cover health checkup expenses, children’s education expenses and support for fuel-saving windbreak heaters.

    “KT&G remains committed to organizing yearly volunteering activities involving our executives and employees,” said Kim Jung-ho, the director of the headquarters of KT&G’s raw materials division, in a statement. “These efforts aim to uphold consistent and stable cultivation practices for leaf tobacco farmers confronting labor shortages. The support we offer to farmers to foster mutual growth continues to persist.”

  • Seed Sales Hint at Record Hectarage

    Seed Sales Hint at Record Hectarage

    Photo: Taco Tuinstra

    Zimbabwean seed sales suggest a record tobacco hectarage in the 2023-2024 growing season, reports The Herald.

    Statistics released by the Tobacco Research Board (TRB) reveal that, by August 8, farmers had procured 847.21 kg of tobacco seed with potential to cover 169,442 ha.

    The largest tobacco hectarage to date was recorded in 2019 when growers planted 146,000 ha. The final crop, livestock and fisheries assessment report shows that last year 131,656 ha were put under tobacco.

    Zimbabwean tobacco growers had sold 294 million kg of tobacco worth $891 million by day 100 of the ongoing 2023 marketing season.

    This is a 44 percent increase in volume and 43 percent rise in value compared to the same period last year.

    The average yield this season has risen to over 2 tons per hectare from 1.7 tons per hectare the previous season.

    As part of its Tobacco Value Chain Transformation Plan, Zimbabwe seeks to create a $5 billion tobacco industry by 2025 through localization of tobacco funding, increased production and productivity, value addition and beneficiation.

  • Malawi Earns $282.63 Million From Tobacco

    Malawi Earns $282.63 Million From Tobacco

    Photo: Taco Tuinstra

    Malawi earned $282.62 million after selling more than 120 kg of tobacco during the 2023 tobacco marketing season, which ended Aug. 4, 2023, reports Malawi24.

    According to Tobacco Commission Public Relations Officer Telephorus Chigwenembe, the average price this year was $2.35 per kg.

    “It was even more exciting towards the end of the season when buyers offered record prices,” said Chigwenembe.

    He went on to say that there were no serious market disruptions as was the case in the past.

    Registration and licensing of farmers for the 2023/2024 growing season continues at Tobacco Commission offices in Mzuzu, Kasungu, Lilongwe and Limbe.

    The Commission has encouraged farmers to grow more tobacco than they did in the 2022-2023 season.

  • Zimbabwe Aims for $1.6 Billion in Exports

    Zimbabwe Aims for $1.6 Billion in Exports

    Image: Tobacco Reporter archive

    So far this marketing season, Zimbabwe has exported more than 98 million kg of tobacco. The country’s goal is to export $1.6 billion total, according to The Herald, an increase from 2022’s $900 million. 

    To date, $502 million has been exported compared to $417 million in the same period in 2022, a 20 percent increase.

    Export value includes what farmers receive in payment for growing, curing and grading the crop as well as what merchants earn for extra processing, packing, application of skills in meeting precise customer orders and final dispatching.

    “In terms of exports from our leaf, we are projecting over $1.6 billion compared to $900 million achieved in 2022, so we are going for growth in every aspect,” said John Basera, Lands, Agriculture, Fisheries, Water and Rural Development permanent secretary. “My expectations are very high; we need to go for better growth.” According to Basera, this year’s tobacco yield is the highest and best ever produced in the country.

    “The season was good, the crop quality was also good and so are the prices,” said Chelesani Tsarwe, Tobacco Industry and Marketing Board (TIMB) public relations officer. “Farmer payments are being done on time as compared to previous seasons. Overall, there was orderly tobacco marketing, and stakeholders are adhering to the board’s compliance frameworks.” 

    “If government continues to empower smallholder farmers like in the case of Pfumvudza, then farmers are assured of getting inputs on time,” said Edward Dune, Tobacco Farmers Union Trust vice president. “Unscrupulous middlemen should totally be eliminated to ensure that farmers get what they actually deserve.”

    “Tobacco has transformed the majority of people, but there is a need to ensure that processing is done in the country to ensure that our farmers get more money,” Dune said.

    Tobacco accounts for the largest foreign currency earning crop in Zimbabwe. The crop is exported throughout the year, but the bulk is bought from contracted farmers. China accounts for 40 percent to 45 percent of total exports. 

  • Strong Start for Universal’s Tobacco

    Strong Start for Universal’s Tobacco

    Photo: Taco Tuinstra

    Universal Corp. reported sales and other operating revenue of $517.7 million in the three months that ended June 30, 2023, up 20 percent over that posted during the same period last year. Operating income declined 17 percent to $11 million.

    Tobacco operations sales and other operating revenues jumped 28 percent to $443.9 million, while  Tobacco operations operating income increased 9 percent to $8.9 million.  

    “Our tobacco operations performed well and are off to a good start for our fiscal year 2024,” said Universal Corp. Chairman, President and CEO George C. Freeman III in a statement.

    “Segment operating income was higher for our tobacco operations segment in the quarter ended June 30, 2023, compared to the quarter ended June 30, 2022, even though we did not have the benefit of large shipments of carryover tobacco from certain origins that we had in first quarter of fiscal year 2023.

    “Demand for leaf tobacco from our customers remains strong, and our level of uncommitted tobacco inventory was 16 percent of tobacco inventory at June 30, 2023. We are forecasting increased leaf tobacco production in fiscal year 2024, compared to fiscal year 2023, and believe that even with that increased production, leaf tobacco will remain in an undersupply position.”

    Freeman also expressed satisfaction with the progress Universal has made integrating its plant-based ingredients platform. He attributed soften-than-expected demand in this segment to high customer inventory levels, but anticipated this situation to be temporary.

    “We believe that we are well-positioned to capitalize on demand from our customers, and that with the investments we are making, we are a stronger partner for current and future customers due to the expanded range of capabilities and products that we can offer them,” said Freeman.