Category: Leaf

  • Zimbabwe Crop Down 10 Percent

    Zimbabwe Crop Down 10 Percent

    Photo: Taco Tuinstra

    An El Nino-induced drought has slashed volumes but raised farmers’ hopes for strong pricing.

    Zimbabwe’s tobacco volume is likely to be at least 10 percent below last year’s record 296 million kg due to drought, reports Reuters.

    The growing season was impacted by El Nino, a natural climate phenomenon in which the surface waters of the central and eastern Pacific Ocean become unusually warm, causing changes in global weather patterns.

    At 113,000 hectares, the tobacco growing area this season was 3 percent smaller than that of last year. Yields per hectare were down, as well.

    Following an ambitious land reform in the 2000s, Zimbabwean tobacco production is dominated by smallholder farmers who lack irrigation systems.

    Zimbabwe’s two licensed Harare auction floors, which handle approximately 5 percent of the country’s tobacco crop, are scheduled to open tomorrow. Deliveries for the far-larger contract sales will commence on Friday.

    Contract tobacco sales will be conducted not only in Harare, but also at approved decentralized selling centers in the countryside. These were set up during Covid-19 to minimize travel but proved so successful that they were maintained after the pandemic receded.

  • TIMB Licenses 32 Contractors

    TIMB Licenses 32 Contractors

    Photo: Taco Tuinstra

    Zimbabwe’s Tobacco Industry and Marketing Board (TIMB) has licensed 32 contractors to buy leaf this season, reports The Herald.

    The country’s tobacco auctions will open March 13, with the contract floors starting operations a day later.

    To date, the regulator has licensed only two auction floors—the Tobacco Sales Floors and Premier Tobacco Auction Floor.

    Contract sales will be conducted in Harare and at decentralized selling centers in Karoi, Mvurwi, Bindura, Marondera and Rusape.

    TIMB Head of Operations Blessing Dhokotera reiterated that tobacco farmers would retain 75 percent of their proceeds in U.S. dollars and the remainder in local currency.  

    He also highlighted measures against child labor, side marketing and the spread of infectious diseases such as Covid-19 and cholera.

    Zimbabwe’s tobacco production has suffered from drought this years, with officials predicting a harvest of 265 million kg this year, compared with 294 million kg in 2023, according to News Day.

    The droughts are attributed to the El Nino climate phenomenon which involves a periodic warming of ocean temperatures in the central and eastern Pacific Ocean, near the equator, and can have significant impacts on weather patterns worldwide.

  • Zimbabwean Growers Urged to Grade Properly

    Zimbabwean Growers Urged to Grade Properly

    Image: Taco Tuinstra

    Zimbabwean tobacco growers’ representatives are urging their constituents to grade their leaf carefully to boost earnings during the selling season, reports The Herald.

    Key factors to consider during grading are plant position, color, quality, length and style, according to Zimbabwe’s tobacco research board, Kutsaga.

    “Prices in the tobacco market are determined during the opening day of the auction floors and depend on the grades of the crop,” said Victor Mariranyika, president of the Tobacco Farmers’ Union Trust. “The grading process starts even before the crop is planted, with factors such as land selection, preparation, fumigation, fertilization, seedling selection, topping and suckering, reaping, curing and storage all influencing the outcome.”

    While the tobacco plants are growing, the emerging leaves are categorized as prime, second and third, producing different colors during curing. Buyers pay more for certain colors and sizes.

    “The current practice of using color as the primary matrix for selling tobacco has proven to be unprofitable for farmers. The prices tend to be lower than the production costs, indicating the need for a different approach,” said Mariranyika.

    Tobacco Farmer Talk (TFT) WhatsApp group administrator Phineas Mukomberenwa announced an upcoming Kutsaga tour that will allow farmers to tour tobacco curing facilities and see grading, baling, tobacco presentation and the fundamentals of tobacco classification.

    “By integrating grading and classification in the tour, TFT aims to equip growers who are still harvesting and struggling with curing with the knowledge while also assisting those ready for the market. The objective is to ensure that tobacco is graded accurately and presented in a manner that secures the best possible prices at the tobacco auction floors,” said Mukomberenwa.

  • Pakistan: Growers Want Control Of Tobacco

    Pakistan: Growers Want Control Of Tobacco

    Photo: Taco Tuinstra

    Pakistani tobacco growers want control of the crop, stating that the federal government should no longer have authority over it because it is the domain of the provincial government under the 18th Amendment, reports Dawn.

    The growers have said that the Pakistan Tobacco Board (PTB) has not looked out for their interests but rather the interests of the buyers and themselves.

    “Its officials have played a controversial role and gave importance to their personal interest over the farmers’ interest,” said Khalid Khan, district president of the Kisan Board. “When PTB officials and representatives of the companies remain in league, how [will] the poor farmers survive?”

    Azizur Rehman, a leading grower in Maneri Bala village, said that if the PTB and companies gave rights to the growers, it would improve growers’ financial positions and bring more people into the farming profession.

  • Zimbabwean Shisha Production Set to Triple

    Zimbabwean Shisha Production Set to Triple

    Photo: Cavendish Lloyd

    Zimbabwe is poised to produce more than 800 million kg of shisha tobacco this season, reports The Herald, citing statistics from the Tobacco Industry and Marketing Board.

    According to the regulator, tobacco growers have planted 407 hectares of the crop this year, marking a 270 percent increase over last year’s hectarage.

    Cavendish Lloyd, the only registered shisha tobacco contractor in Zimbabwe, expects better quality and yields this year as growers had gained experience and put into practice last year’s recommendations from buyers.

    A company representative said he anticipated yields of between 2,000 kg and 2,300 kg per hectare.

    Derived from imported seed varieties, the shisha flue-cured tobacco requires different agronomic practices than Zimbabwe’s traditional flue-cured crop.

    The shisha tobacco is characterized by low nicotine levels (below 1 percent) and high sugar levels (above 25 percent). To achieve the lower nicotine levels, farmers grow 3,000 plants per hectare—double the number that is typical for Zimbabwe’s traditional flue-cured crop. The density ensures the plant competes more fiercely for nutrients, which in turn reduces nicotine levels.

    In its inaugural year of commercial production (2023), shisha tobacco farmers earned an average of $3.15 per kilogram.

    Tobacco Reporter profiled Cavendish Lloyd’s Zimbabwean shisha operations in its May 2022 print edition (see “Great Expectations”).

  • PMI To Build Cigarette Factory in Tanzania

    PMI To Build Cigarette Factory in Tanzania

    Photo: Taco Tuinstra

    Philip Morris International will build a cigarette factory in Morogoro and buy at least 12 million kg of Tanzanian tobacco annually over the next five years, reports The Citizen. The company hasn’t purchased leaf from Tanzania since 2017.

    According to Minister of Agricultura Hussain Bashe, PMI has partnered with another firm in Tanzania to build a cigarette factory, which he says may commence operations toward the end of 2024.

    Tanzania tobacco farmers produced 120 million kg in the most recent growing season. This year, they are expected to cultivate 200 million kg.

    Anti-tobacco groups criticized PMI’s decision to build a factory. “The announcement is yet another act of hypocrisy from the tobacco giant that claims it is committed to “delivering a smoke-free future. You don’t achieve a smoke-free future by building new cigarette factories or by shipping 613 billion cigarettes worldwide, as Philip Morris did in 2023,” said Yolonda Richardson, president and CEO of the Campaign for Tobacco-Free Kids, in a statement.

    “The move by Philip Morris to double down on cigarette sales in Africa shows that the company is blowing smoke and can’t be taken seriously when claiming that it wants to end cigarette sales. Philip Morris is working to sell as many cigarettes as it can for as long as it can.”

  • Zimbabwe Prepares for Marketing Season

    Zimbabwe Prepares for Marketing Season

    Image: Taco Tuinstra

    Zimbabwe’s tobacco growers are preparing for the 2024 marketing season, set to begin in March, reports Xinhua News.

    Farmers remain hopeful for a successful season despite unfavorable weather patterns that affected some crops—late onset of rains and severe hailstorms in some areas.

    This year’s projection is 250 million kg of tobacco due to the dry spell compared to last year’s record high of 296 million kg, according to Chelesani Tsarwe, public affairs officer of the Tobacco Industry and Marketing Board (TIMB). By 2025, the government aims to increase production to 300 million kg per year.

    Tobacco auction floors will open March 13, according to the TIMB. Contract floors will open March 14. 

    Favorable pricing will be crucial for farmers to cover costs, especially for small-scale farmers, who make up over 80 percent of the country’s tobacco farmers, according to George Seremwe, president of the Zimbabwe Tobacco Growers Association.

    Tobacco is a major foreign currency earner in the country.

    “We think it will be very important for the government and the stakeholders to work on value addition, that is, value addition locally; with that, probably, we hope that the profits will also be shared among farmers,” said Seremwe.

  • Pyxus Reports Strong Results

    Pyxus Reports Strong Results

    Photo: Pyxus International

    Pyxus International reported sales and other operating revenues of $1.6 billion for the nine months that ended Dec. 31, 2023, up by 8.2 percent over the figures posted for the comparable 2022 period. The company reported positive net income in each of the first three quarters of fiscal 2024 to reach a total of $12.7 million compared to a net loss of $18.5 million in the same period of fiscal 2023. Average gross profit per kilogram increased by 28.3 percent to $0.77.

    “Our teams around the world continue to demonstrate their ability to drive broad-based improvement, leveraging our business momentum and strong position in the current market to produce solid third-quarter and year-to-date results,” said Pyxus President and CEO Pieter Sikkel in a statement. “This success positions us to increase our full-year guidance as we remain focused on concluding an outstanding fiscal year.”

    The company attributed its improved sales and operating revenues to consistent execution, an inventory mix well matched to specific customer demand and an increase in average pricing of 10 percent. This growth was slightly offset by a 1.9 percent reduction in volume.

    Sales and other operating revenues in the third quarter of $529.8 million were lower as compared to $655.6 million in the same period of the prior year. The decrease was principally due to a 22.7 percent decrease in volume, which primarily reflects a difficult comparison to the year-ago quarter, which benefited from the inclusion of previously delayed shipments as well as acceleration of shipments from the current-year quarter into the first half of the fiscal year, according to Pyxus. The impact of the volume decline was partially offset by an average market sales price increase of 3.7 percent in this year’s third quarter.

    Third quarter net income improved to $3.8 million as compared to a net loss of $2.3 million in the prior year’s third quarter despite the inclusion of a noncash expense of $12 million related to a pension termination in the United Kingdom.

    “Our operational discipline, improved working capital efficiency and geographic diversification enabled us to purchase more tobacco even as we accelerated our repayment of outstanding lines of credit,” said Sikkel. “We believe these attributes enable the company to deliver significant and sustainable value to its financial stakeholders and support further potential improvements in our operational results and working capital.”

  • Product Mix, Demand Boost Universal Income

    Product Mix, Demand Boost Universal Income

    Photo: Tobacco Reporter archive

    Universal Corp. reported operating income of $153.8 million for the nine months that ended Dec. 31, up 20 percent over the comparable period in 2022. Tobacco operations contributed 148.9 million in income, 25 percent more than in the first nine months of the previous year. Universal attributed the performance of its tobacco operations largely to higher prices and a more favorable product mix, partially offset by lower tobacco sales volumes.

    “Our tobacco business continued to perform very well, driven by a favorable product mix and strong demand from our customers,” said Universal Chairman, President and CEO George Freeman III in a statement.

    “Improved margins, larger crops in Africa, and strong tobacco shipments in line with our expectations benefited our results in the nine months and quarter ended Dec. 31, 2023, compared to the same periods in fiscal year 2023.

    “Global leaf supply for all types of leaf tobacco continues to be tight, and as of December 31, 2023, our uncommitted tobacco inventory was at a low level of 8 percent. While we expect global leaf tobacco supply to remain tight in fiscal year 2025, in part due to El Nino weather conditions, we believe the strength of our diverse global footprint will help us satisfy our customers’ leaf tobacco needs.”

    Freeman also expressed satisfaction with the progress made by Universal’s ingredients business, particularly with the expansion of the company’s factory in Lancaster, Pennsylvania, USA, and the advancement in achieving Universal’s sustainability agenda. The company recently published its 2023 sustainability report and announced its participation in a solar project that it believes will help Universal reduce its operational greenhouse gas emissions by a third by 2030.  

  • Zimbabwe Markets to Open March 13

    Zimbabwe Markets to Open March 13

    Photo: Taco Tuinstra

    Zimbabwe’s tobacco auctions will open March 13, 2024, reports The Herald, citing a Tobacco Industry and Marketing Board (TIMB) announcement. Contract floors will open one day later,

    Last year, the tobacco marketing season started on March 8 for auction floors and March 9 for the contract buyers.

    TIMB statistics show that farmers had planted 113,101 hectares under the crop by Feb. 2, a 4 percent decline from last year’s 117,645 ha.

    Meanwhile, some farmers welcomed the announcement of the dates, saying that would help improve liquidity in the market.

     Zimbabwe Tobacco Association (ZTA) chief executive officer, Rodney Ambrose said he expects the market to be significantly firmer than previous seasons to counter the high production costs. Zimbabwe’s tobacco growing season has been impacted by alternating wet and dry conditions, which has contributed to an increase in pests and diseases. Given that other leaf origins, such as Brazil, have also struggled with extreme weather conditions this year, Ambrose expects leaf prices to be high.

    The ZTA has asked the Reserve Bank of Zimbabwe (RBZ) to increase the share of earnings that growers are allowed to retain in U.S. dollars from the current 75 percent.

     The government standardized all export retentions to 75 percent with the balance of 25 percent liquidated at the ruling interbank rate. Last year, farmers retained 85 percent of their earnings in foreign currency, with the 15 percent balance liquidated into local currency.