Category: Leaf

  • Malawi 2024 Volume Up 17 Percent

    Malawi 2024 Volume Up 17 Percent

    Photo: Taco Tuinstra

    Malawi will produce 17 percent more tobacco this year than it did in the 2023 growing season, reports Malawi24, citing a survey conducted by the Tobacco Commission (TC).  

    The TC projects production of 140 million kg this season. Last year, the country’s farmers sold 120 million kg.

    While the projections are up over those of last year, they are down from earlier estimates. The first crop survey conducted in January 2024 showed a 21 percent increase in 2024 tobacco production from that of 2023.

    TC Public Relations Officer Telephorus Chigwenembe attributed the decrease to prolonged dry spells in most parts of the country and the poor establishment and performance of some dark fire cured tobacco in the Malawi’s northern region

     The report of the first nationwide survey credited the good prices offered in 2023, increased number of growers, increased sponsorship and availability of inputs as reasons for the larger crop estimates.

    Tobacco estimate surveys in Malawi are conducted by players in the industry and are coordinated by the Tobacco Commission.

  • Zimbabwe Aims for $60 Billion Tobacco Industry

    Zimbabwe Aims for $60 Billion Tobacco Industry

    Zimbabwe plans to create a $60 billion tobacco industry by 2028, according to The Herald.

    The government is currently working to increase processing and value addition of tobacco from 2 percent to more than 30 percent to boost earnings.

    Zimbabwe currently earns about $1 billion from its annual tobacco exports, which is 6 percent of the global market.

    “In terms of the value transformation strategy, we must tap into the value of our tobacco,” said Obert Jiri, permanent secretary for Lands, Agriculture, Fisheries, Water and Rural Development, noting that the tobacco produced is worth over $60 billion when fully processed across the value chain.

    “We understand that most of our tobacco is exported, and the strategy is to tap into that value chain. We are happy that some are doing cigars, some little value addition in terms of cigarette production. The strategy we have as a government is really to ensure that we encourage investments in proper value addition so that we don’t export our raw materials.”

    According to Kutsaga CEO Frank Magama, the board is breeding tobacco seeds for international markets. “We have trials that are happening in Italy, Brazil, China, and our varieties are also grown in China. The direction that we take from the government, in terms of breeding, is that we must make sure that we have quality products. We excel in tobacco, so our products are now found in the region where we are able to earn foreign currency for the country,” he said.

    The Kutsaga Tobacco Research Board recently introduced climate-smart tobacco varieties, enabling farmers to continuously have good harvests despite climate change and new pathogens.

    Zimbabwe’s plans are part of the government’s ambitious Tobacco Value Chain Transformation plan.

  • Zimbabwe: Auction Prices Hit Record High

    Zimbabwe: Auction Prices Hit Record High

    Photo: Taco Tuinstra

    Tobacco prices on Zimbabwe’s auction floors hit a record high of $5.05 per kilogram, the highest price in 10 years. The previous high was $4.99 per kilogram.

    The increase comes primarily from “freed-funded” tobacco, which is grown by individual farmers and accounts for 7 percent of the total crop, according to The Herald.

    The remainder of the tobacco crop is funded under contract schemes that are mainly sponsored by foreign companies.

    Auction prices have increased 26 percent year-over-year while contract prices have increased 13 percent, according to the Tobacco Industry and Marketing Board. The auction floor price increase has reignited calls for an increase in local financing for tobacco growing.

    “The continued reliance on contract farming after two decades suggests there might be deeper issues with the model itself,” said Tobias Musara, a Harare-based development economist. “Ideally, a few seasons of participation should equip the farmers for self-sufficiency. This dependence on contract financing needs to be addressed to ensure long-term benefits for our local farmers.”

    Contract farming began around 2004, a few years after the government confiscated commercial farms and distributed the land among smallholder growers.

  • Europe OKs Aid to Bulgarian Growers

    Europe OKs Aid to Bulgarian Growers

    Photo: Tobacco Reporter archive

    The European Commission has approved a BGN170 million ($94.1 million) Bulgarian package to aid tobacco farmers and other agricultural producers impacted by the war in Ukraine, reports SeeNews.

    The aid, disbursed as direct grants capped at €280,000 ($302.923) per beneficiary, will cover part of the losses of not only tobacco growers but also of fruit producers, vegetable growers and beekeepers, among others.

    Developed under the Temporary Crisis and Transition Framework, the grants apply for the framework’s entire duration, from March 2022 to the end of June 2024, taking into account the total aid received by each agricultural producer during this term.

  • Tobacco Production Rising in Mozambique

    Tobacco Production Rising in Mozambique

    Photo: Taco Tuinstra

    Mozambique produced MZN4.48 million ($70,132) worth of tobacco in 2023, up 23 percent from the previous year, reports The Macao News, citing the Ministry of Economy and Finance.

    The value increased despite a drop in volume, which was down 15 percent in the 2022–2023 growing season. Mozambique is the eighth-largest tobacco-growing area globally and the third largest in Africa, with 76,850 hectares dedicated to tobacco, following Zimbabwe (112,700 ha) and Malawi (100,982 ha).

    According to the World Health Organization, Africa saw an increase of 35.7 percent in tobacco leaf production and an increase of 19.8 percent in area under tobacco cultivation from 2005 to 2020, when both were trending down globally.

  • Short Brazilian Crop Selling Rapidly

    Short Brazilian Crop Selling Rapidly

    More than half of the tobacco produced in southern Brazil had been sold by the middle of March, reports Kohltrade, citing figures released by the growers’ organization Afubra. Driven by a short crop, the average per-kilo price was up nearly 20 percent over that paid during 2022-2024 marketing season.

    According to the Ministry of Development, Industry and Commerce, Brazil shipped 512 million kg of tobacco in 2023, generating $2.73 billion in earnings. In the first two months of 2023, the country exported 75.3 million kg valued at $492.7 million.

    According to information from Emater-RS, tobacco prices reached values above BRL20 ($4.02) per kilo for dry leaf, reaching up to BRL390 per arroba [11.34 kg]  for tobacco classified as BO1 in some regions. However, producers expressed concern about the weight of the leaves, which has been lower than anticipated due to heavy rains during the growing season.

    Reduced volumes and high prices are also accelerating leaf sales. Industry representatives expect sales, which normally extend to the end of June, to end in late April this season.

    Brazil’s tobacco crop has been heavily impacted by the El Nino weather phenomenon this year. When production started in May 2023, the industry expected to harvest 10 percent more  leaf than in the 2022-2023 growing season based on the area planted.

    While the climate conditions initially supported the expectations for a larger crop, heavy rains from mid-July to the end of November forced the industry to adjust its figures downward. Instead of a 10 percent increase, market watchers are now predicting 20 percent drop in volume compared with 2023.

    Rainy growing seasons tend to result in lower nicotine levels. Because this season’s heavy downpours followed three years of drought, which resulted in record high nicotine levels for Brazilian tobacco, there is now an unprecedented gap in the nicotine levels of the 2023 and 2024 harvests, averaging 0.35 percent to 0.5 percent for grades XC to BM, and up to 0.8 percent for grades B and BT.    

    But while nicotine levels have declined, the quality of Brazil’s tobacco is up significantly, with great maturity and a very good aroma. According to Kohltrade, Brazil’s tobacco this year has a very good and intense “flavor,” including in XC grade. Leaf position is showing good quality, and what in previous years was predominantly “LO” to “OF” light orange to orange, this year is “O” orange to “F” full orange or deep orange.

    Overall, the industry expects a small drop in sugar levels.

    With the reduction in volumes, competition has been fierce for Brazil’s 2024 crop. All companies are rushing to buy their volumes and serve their customers, greatly inflating the market and accelerating the process of purchasing tobacco.

  • Zim Growers Worried About Price Fixing

    Zim Growers Worried About Price Fixing

    Photo: Taco Tuinstra

    Tobacco growers in Zimbabwe have voiced concern over tobacco leaf prices at the auction floors, which have capped out at $4.99 per kilogram compared to around $6 per kilogram on the contract floors, reports NewsDay. Growers are worried about buyer collusion.

    “The season is progressing reasonably well, even though we have raised concern about the $4.99 cap, which is on the auction system, and for us, it’s a kind of a sign of collusion, which is worrisome,” Zimbabwe Tobacco Growers Association President George Seremwe said. “We cannot have the auction system offering lower prices than the contract.”

    “The contract has gone up to $6.90, and for us, there is a discord,” Seremwe said. “The same buyers who are buying at the auction are the same buyers who are also buying at the contract.

    “So that’s why we suspect there’s collusion. We would want the prices to go up because if you look at the production cost, it was quite high.”

    Tobacco growing will not be sustainable for the farmers due to poor auction floor prices, according to Seremwe. “So, the growth of tobacco has to be attractive by the prices. We know the price world over has gone up, so we also expect the prices to go up than what is currently prevailing on the market,” he said.

    “We talk of sustainability of the farmer. As farmers, we think it is not sustainable at the moment.”

    Farmers expected the prices to be better compared to last year, said Shadreck Makombe, president of the Zimbabwe Commercial Farmers’ Union. “The prices are not yet at what we would have expected,” Makombe said. “We would have expected a few coins up.”

    “Again, it’s the only start of the marketing season, [and] most of the tobacco being sold there is primary leaf tobacco, not quite what we want,” he said. “We expect the prices to firm up or to increase for the farmers to get anything meaningful from their crop.”

  • Sales Reach $13 Million as Season Starts

    Sales Reach $13 Million as Season Starts

    Photo: Taco Tuinstra

    Tobacco sales at Zimbabwe’s auction and contract floors has reached 1 million kg by day three of the marketing season. Farmers have earned $13 million so far, a 216 percent increase from the $4 million earned in the comparable period last year, according to The Herald.

    Tobacco Industry and Marketing Board (TIMB) statistics show that there has been a 167 percent increase in volume sales by day three at both auction and contract floors, from 1,555,090 kg to 4,148,403 kg.

    The average auction price is $3.15 per kilogram. Contract floors have recorded an average price of $3.11 per kilogram. The overall average price this year is $3.12 per kilogram, an 18 percent increase from the $2.63 per kilogram seen last year.

    This year, there was a 201 percent increase in total bales and a 62 percent decrease in bale rejection.

    The highest price seen on the auction floor was $4.99 per kilogram while the highest price on the contract floor was $6.50 per kilogram. The lowest price on both floors was $0.10 per kilogram.

    “The $4.99 per kilogram price ceiling has not yet been broken, and we have noticed a worrying trend where contract pricing seems not to make use of the prices determined on the auction to inform their pricing,” said George Seremwe, chairman of the Zimbabwe Tobacco Growers Association (ZTGA). “This discord needs to be addressed by having more tobacco on auction for competition.”

  • Call for Climate-Proof Agriculture in Zimbabwe

    Call for Climate-Proof Agriculture in Zimbabwe

    Photo: Taco Tuinstra

    Smallholder farmers, who are the backbone of Zimbabwe’s tobacco farming industry, should have access to affordable irrigation facilities, according to the Minister of Lands, Agriculture, Fisheries, Water and Rural Resettlement Anxious Masuka.

    This years tobacco growing season was impacted by an El Nino-induced drought, which caused leaf volumes to be 10 percent below those of last year’s record 296 million kg.

    “We must take innovative ways to climate-proof agriculture,” Masuka was quoted as saying at the opening of the marketing season by The Star. “Seventy-five percent of our tobacco is grown by the smallholder sector who invariably depend on the rains to plant their tobacco.”

    The start of the tobacco marketing season is an important event in Zimbabwe’s farming calendar, as tobacco is the country’s largest agricultural export.

    Tobacco exports earned Zimbabwe nearly $1 billion in 2023, according to the Tobacco Industry Marketing Board.

    This year the first bale of the golden leaf was auctioned for $4.92 per kg compared to $4.35 last year.

  • Zimbabwe Tobacco Season Opens

    Zimbabwe Tobacco Season Opens

    Image: Taco Tuinstra

    Zimbabwe’s auction floors opened today, with high expectations for better prices this season compared to last year, according to The Herald. Deliveries of the contract crop start tomorrow.

    Tobacco growers in the country faced poor rains this season, but those with a good crop expect better prices due to demand. The Tobacco Industry and Marketing Board (TIMB) stated that Zimbabwe exported 233,896,182 kg valued at $1.22 billion as of Dec. 15, 2023. The average price for shipments was $5.23 per kilogram.

    The auction floors only sell about 5 percent of the crop but are considered the major price setter compared to the contract floors.

    Farmers will receive 75 percent of their earnings in foreign currency with the remaining 25 percent in local currency.

    Only two auction floors have been licensed this year by the TIMB to buy leaf, the Tobacco Sales Floor and Premier Tobacco Auction Floors (PTAF).

    “We have finished all preparations,” Owen Murumbi, PTAF chairman, said yesterday. “The banks are now lined up, EcoCash and Mukuru are all there to bring more convenience to the farmers.

    “We have started receiving bales. We should surpass last year’s figures although the volumes are low. We don’t expect them to go down. Farmers need to come, and we are offering excellent services. We are starting with Mukuru and EcoCash on day one. This should improve payment systems for farmers.

    “Tobacco sales floors should implement strict age verification processes to ensure that only adults can access the premises. All selling points shall ensure there are no children under 18 in and around selling premises, tobacco processing factories and any other tobacco storage and handling facilities.

    “Sales floors should prominently display awareness campaigns that highlight the issue of child labor in tobacco production, posters and educational materials that provide information about the harmful and unethical practices associated with child labor.”

    The TIMB has created a transporter compliance framework that will work toward developing a system that monitors movement of tobacco from the primary source to the market. The framework is expected to minimize losses, enhance farmer viability and improve livelihoods and aims to curb side marketing, tobacco bale theft, bale swapping and forgery on stop order launching.

    “We appeal to the authorities to ensure that tobacco sold at the auction floors get similar prices with the one which is sold at the contract floors,” said Barbra Marava of Banket. “Farmers incur similar costs, and there is no reason to offer them different prices like before.”