Tag: Tobacco Industry and Marketing Board

  • 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.

  • Zimbabwe Farmers Demand Premiums

    Zimbabwe Farmers Demand Premiums

    Photo: Taco Tuinstra

    Following a 30 percent increase in tobacco export earnings to $1.3 billion in 2023, Zimbabwean tobacco farmers are pushing for increased premiums, according to The Herald.

    In 2023, Zimbabwe exported tobacco products worth $1.3 billion, up from $998.1 million in 2022, according to the Zimbabwe National Statistics Agency (ZimStats). In volume, the increase was 20 percent for the same period.

    “The huge gap between what ends in the farmer’s pocket and what exporters take home is a big anomaly that needs to be addressed,” said George Seremwe, chairman of the Zimbabwe Tobacco Growers Association (ZTGA). “Participation of farmers in the value addition chain needs to be enhanced by making sure they take ownership of the crop all the way to the market.”

    Seremwe stated that there should be a premium price paid back to farmers after the value addition process as happened in the past. He also argued for a model that rewards farmers in terms of export earnings.

    “We used to have export retention schemes from the Reserve Bank of Zimbabwe. This needs to be revived so that the farmer gets more value from the crop,” the ZTGA chair said.

    “The grower is the weakest link in this matrix and needs protection from (the) government,” said Zimbabwe Progressive Tobacco Farmers Association (ZPTFA) president Mutasa Mutandwa.

    “The Tobacco Industry and Marketing Board needs to thoroughly monitor contractors as per the compliance administration framework in order to find out what inputs have been given to farmers versus the crop they are buying,” said Mutandwa.

    “Our crop is fetching high prices on the international market, as it is used as a blender, but the farmer is not benefiting. There is need for massive investment in tobacco processing plants to increase exports of high-priced manufactured products,” explained the ZPTFA president.

    The Tobacco Value Chain Transformation Plan aims to increase value addition from 2 percent to 30 percent by 2025 to reach a $5 billion tobacco industry.

    “The price at the floors can only be enhanced by improving the quality of the leaf as buyers prefer clean and clear styles,” said Shadreck Makombe, president of the Zimbabwe Commercial Farmers Union. “There is need to have more investment in processing to enhance value addition.”

  • Zimbabwe Growers Cheer Extension of Planting Deadline

    Zimbabwe Growers Cheer Extension of Planting Deadline

    Photo: Taco Tuinstra

    Tobacco growers in Zimbabwe have welcomed a government decision to extend the tobacco planting deadline, reports The Herald.

    Originally, farmers were required to clear their seedbeds by Dec. 31. However, due to the late start of the 2023-2024 season, the Ministry of Lands, Agriculture, Fisheries, Water and Rural Resettlement, has postponed the deadline to Jan. 15.

    Zimbabwe Tobacco Growers Association Chairman George Seremwe said farmers appreciated the government’s gesture, adding that it would lead to an increase in the planted area.

    “The rainfall season started just before Christmas for most tobacco areas and the dryland farmers are busy planting, hoping to have finished planting by Jan. 15,” he was quoted as saying. “As the season seems to have shifted due to the dry spell, the combination of current rains and the deadline extension will enable the hectarage to increase, thereby allowing the Tobacco Industry and Marketing Board [TIMB] to adjust its projections on hectarage and yields upwards.”

    “This is a noble idea that will allow those seedlings in seedbeds that had survived the recent moisture stress from lack of water and excessive heat to resurrect after the current rains,” said Tobacco Farmers Union Trust President Victor Mariranyika.

    While granting the extension, Minister of Agriculture Anxious Masuka warned that growers who fail to adhere to the deadline would risk stiff penalties and even prison sentences.

    As of Dec. 15, the planted areas was down 27 percent, from 75,4111 ha in 2022 to 55,170 hectares in 2023, according to the TIMB.

  • Farmers Demand Full U.S. Dollar Retention

    Farmers Demand Full U.S. Dollar Retention

    Photo: Taco Tuinstra

    Zimbabwean tobacco farmers have asked the government to allow them to retain 100 percent of their earnings in U.S. dollars in the upcoming selling season, reports The Herald.

    The request comes after the Reserve Bank of Zimbabwe (RBZ) announced tobacco growers will be paid only 75 percent of their sale proceeds in foreign currency in the 2023-2024 season. The remaining 25 percent is to be settled in local currency at the prevailing interbank market rate.

    This ratio is down from the 85/15 percent split that applied in the 2022-2023 season.

    Zimbabwe Tobacco Growers Association (ZTGA) Chairman George Seremwe said tobacco farmers need to retain all of their earnings in foreign currency because their production cost, too, are foreign-currency based. Under the prevailing split, farmers struggle to turn a profit, according to Seremwe.

    Zimbabwe Tobacco Association CEO Rodney Ambrose concurred. “Tobacco production costs are already 90 to 100 percent dollarized. Last season’s 85 percent retention assisted in improving growers’ viability, more so given the flattening out of farmers tobacco prices and increased costs of production,” he said.

    “Contractors have lent out almost 100 percent of their loans in foreign currency to farmers, anything less than the current 85 percent retention will negatively impact on growers’ viability.”

    “It’s unfortunate that 75/25 split portion reverses the gains made, we hope that the policy will change in February 2024,” said Tobacco Farmers Union Trust President Victor Mariranyika. “This previous season’s 85 percent retention was not enough for farmers, so we were looking forward to 100 percent foreign currency retention in the 2024 marketing season,” he said.

    Under the Tobacco Value Chain Transformation Plan, Zimbabwe aims to sustainably produce 300 million kilograms of flue-cured tobacco by 2025. In 2023, the country’s farmers produced 296 million kg and earned $897 million.

    A Nov. 10 report by the Tobacco Industry and Marketing Board (TIMB) shows the number registered tobacco growers declined by a quarter for the 2023-2024 season.

  • Zimbabwean Farmers Bemoan Power Cuts

    Zimbabwean Farmers Bemoan Power Cuts

    Photo: Taco Tuinstra

    Power cuts  in Zimbabwe are impacting irrigation and increasing tobacco farmers’ production costs, reports The Herald, citing Zimbabwe Tobacco Association (ZTA) CEO Rodney Ambrose.

    “Power outages from about 0500 hours in the morning to as late as 2200 hours are a major concern in most growing areas at the moment,” Ambrose was quoted a saying. “Growers are struggling to complete their irrigation cycles and are relying on diesel powered generators, incurring huge costs.”

    Ambrose said the crop quality, yield and grower viability would likely be compromised as the option of running generators for irrigation is not sustainable. With curing of the irrigated crop scheduled to start in early December power demand will increase further.

    “We are engaging with the power utility to identify clusters where power supply can be prioritized just like they did for the wheat program. However, if power deficits persist nationally, the cluster solution may not entirely resolve the issue. The next option is to plead with the government to provide subsidized diesel or allow duty free imports of fuel primarily for powering generators,” said Ambrose.

    Ambrose believes the long-term solution is for farmers to transition to solar power although this has a costly outlay that requires growers to have access to long term financing.

    It will also require the government to permit duty-free and tax-free imports of solar equipment for farming activities, he added.

    Tobacco farmers have planted 22,298 hectares this season, including 16,962 hectares of irrigated tobacco, according to the Tobacco Industry and Marketing Board.

    The report said 105,805 growers had been registered so far compared to 133,724 registered growers during the same period last year, marking a 26 percent decline.

  • Coal to Tackle Cost and Deforestation in Zim

    Coal to Tackle Cost and Deforestation in Zim

    Photo: Michal

    Zimbabwe’s Tobacco Industry & Marketing Board (TIMB), Kutsaga research station and Hwange Colliery Co. have jointly developed a special coal facility to help reduce tobacco farmers’ production costs and address deforestation concerns, reports the Zimbabwe Independent.  

    The facility will benefit TIMB-registered growers with active grower numbers. TIMB said negotiations were underway with transporters to ensure that the coal is delivered to farmers on time and at affordable rates.

    “The high cost of tobacco production is one of the main challenges bedeviling tobacco farmers in Zimbabwe,” TIMB spokesperson Chelesani Tsarwe told NewsDay Farming, referring to the prices of production inputs, energy and other farming necessities.

    The coal facility, she said, will help tobacco farmers realize significant savings in the curing process.

     Zimbabwe Tobacco Growers Association president George Seremwe welcomed the arrangement. “The outcry has been us tobacco farmers through our associations, lobbying and advocating reduction on the cost of production and they started sort of goal rolling by engaging different suppliers in this case, Hwange Colliery Co. to come up with cheaper modalities, better way of cushioning the farmer in the form of reduction on the cost of production,” he said. “We are very happy and pleased to hear such an initiative happening.”

    More than 70 percent of Zimbabwe’s  tobacco crop is cured using unsustainable wood, with deforestation increasing, according to Zimbabwe Tobacco Association CEO Rodney Ambrose.

    “While the industry embarks on reforestation programs, more efficient curing systems and alternate sustainable curing fuels, stop-gap measures need to be put in place in order to ensure that we maintain our production levels and protect the livelihoods of thousands of farmers,” he said.

     “One of the measures is coal, and to reduce the cost of purchasing and delivering the product to farmers.”

     Zimbabwe achieved a record crop of 296 million kg of tobacco for the 2022-2023 season, earning nearly $1 billion from leaf sales.

     This year’s sales volumes put Zimbabwe on track to achieve its target of 300 million kg by 2025, as formulated in the Tobacco Value Chain Transformation Plan, ahead of schedule.

  • TIMB Urges Sustainable Crop Growth

    TIMB Urges Sustainable Crop Growth

    Photo: Taco Tuinstra

    Zimbabwe is on track to export $1.5 billion worth of tobacco, according to Tobacco Industry & Marketing Board (TIMB) Acting CEO Emmanuel Matsvaire.

    In an interview with The Zimbabwe Independent, Matsvaire shared his views on the challenges and opportunities facing the country’s tobacco sector.

    To date, Zimbabwe has exported about 105 million kg of tobacco at an average of $5.04 per kg, compared to 93 million kg exported during the same period last year at an average price of $4.62 per kg.

    The Far East remains the top destination for Zimbabwean tobacco, according to Matsvaire, making up about 41 percent of total exports. The region also has the highest average export price due to high quality tobacco that goes here.

    Out of the 295.5 million kg of tobacco sold this season, the TIMB estimate that about 5 million kg have been side-marketed, which is less than 2 percent of the total crop.

    The regulators has worked hard to fight the practice, according to Matsvaire. “We have brought in a new compliance framework. We have also established a new department that ensures that compliance is up to date. We also have an inspectorate department and field officers on the ground,” he told The Zimbabwe Independent.

    Matsvaire stressed the importance of matching production to demand, and of adhering to proper production practices. “We need to ensure that there is a balance between price and what is produced, and quality as well as quantity,” he said. “We do not wish to increase volumes without good quality. We ensure that we are also growing sustainably using the right sources of energy and labor. We do not need to use children in growing tobacco. We also need to ensure that our environment is safe. Our growth has to be sustainable growth.”

  • Zimbabwe Crafting Funding Scheme

    Zimbabwe Crafting Funding Scheme

    Photo: stringerphoto

    The Tobacco Industry and Marketing Board (TIMB) and Zimbabwean banks are jointly working on a scheme to provide funding to farmers, reports The Sunday Mail, citing a senior official.

    As part of its Tobacco Value Chain Transformation Plan, which seeks to retain more value from the industry in Zimbabwe, the government seeks to increase local funding for production of the crop.

    Currently, about 90 percent of tobacco production is financed through offshore loans under contract schemes.

    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 proceeds are used to pay offshore loans. Critics have suggested the cost of inputs have been highly inflated in some cases.

    Smallholder growers struggle to access finance because they lack security. The proposed model seeks to enable growers to access the loans even without collateral, TIMB acting chief executive Emmanuel Matsvaire said in an interview Aug. 31.

    Last month, the Reserve Bank of Zimbabwe scrapped the requirement compelling merchants to source offshore financing to fund production and buying green leaf from farmers.

  • TIMB Introduces Natural Air Curing Systems

    TIMB Introduces Natural Air Curing Systems

    Image: THAWISAK | Adobe Stock

    The Tobacco Industry and Marketing Board (TIMB) in Zimbabwe has introduced a natural air curing system (NACS), reports New Zimbabwe.

    The new NACS will help prevent farmers from losing leaf due to lack of space in curing facilities. NACS is a drying technique that forces ambient air through the leaf to attain acceptable moisture content.

    “This significantly reduces farmers’ post-harvest yield losses and ultimately improves farmer viability, profitability and sustainability,” said the TIMB.

    “The introduction of this natural Virginia tobacco product to the Zimbabwe tobacco industry is in line with the Tobacco Value Chain Transformation Plan, which has the farmer at the core of the transformation and seeks to improve productivity and sustainability.”

    “The introduction of new systems and practices will also aid in addressing side marketing.  Farmers’ cost of production will be reduced, increasing profitability, thereby reducing farmer incentive to side market.”

    “Atlas Agri (Private) Limited will be joining TIMB to spearhead this new initiative,” added the TIMB.

  • Zimbabwe: Prices up as Auctions Open

    Zimbabwe: Prices up as Auctions Open

    Photo: Taco Tuinstra

    Tobacco prices in Zimbabwe fetched $4.35 per kg at the start of the new marketing season today, up from $4.20 last year, reports Reuters.

    “It looks like we are going to have a good crop,” said Tobacco Industry and Marketing Board (TIMB) Chairman Patrick Devenish, who credited favorable rainfalls.

    The TIMB expects the country to produce 230 million kg of tobacco this year, 8.5 percent more than in 2022.

    Tobacco land use grew to 117,000 hectares this year from 110,000 hectares in 2022, according to the TIMB. The industry also saw an increase in the number of tobacco farmers to 148,527 this year from 123,000 in 2022.

    The tobacco industry contributes nearly $1 billion to export earnings every year, Zimbabwean Vice President Constantino Chiwenga said on March 8. Government statistics showed it accounted for more than 12 percent of exports in January.

    Zimbabwe is currently implementing a “Tobacco Value Chain Transformation Plan,” which seeks to extract more profit from the sector by processing raw leaf into higher-value products.

    “We seek to localize the financing of tobacco. We wish to transform the tobacco sector so we don’t export value,” Agriculture Minister Anxious Masuka said on March 8.

    “This industry is on the cusp of growth.”