Tobacco Industry and Marketing Board - Tobacco Reporter

Buyer Loses License Over Side Marketing

Zimbabwe’s Tobacco Industry Marketing Board (TIMB) canceled Leanrise Tobacco’s buying license after finding the company guilty of side marketing, reports Zimeye.

According to the TIMB, Leanrise illegally leased its license to Munyasha Tobacco.

Leanrise denied the accusations and accused the regulator of misinterpreting the law. “We are not side marketing and there is nothing to substantiate any allegation of such nature,” the company said.

Leanrise argued it is entitled to have agents to advance its business. “Any tobacco purchased by the use of the Leanrise license is tobacco purchased for Leanrise,” the company noted. “In any event, the Leanrise license cannot be used to purchase tobacco from growers who are not contracted with Leanrise.”

The TIMB was unpersuaded by Leanrise’s defense, however. “After considering the contents therein, your justification for leasing your license to Munyasha Agro Pvt. Ltd. and all circumstances surrounding the matter, the Tobacco Industry and Marketing Board has decided to cancel your license in terms of the Tobacco Industry and Marketing (Prohibition of side marketing) Regulations, 2022 SI 77 of 2022,” the TIMB wrote.

January 13, 2023

Zim Farmers Pleased with Early Tobacco

Farmers in Zimbabwe’s Karoi and Headlands area have been pleased with the quality of early planted tobacco, reports The Herald.

The crop is generally reported to be in good condition and many small-scale farmers, who rely on rainfall, are still in the process of planting.

This year to date, Zimbabwean tobacco farmers have planted 53,571 ha of tobacco compared with 38,312 ha during the previous growing season, according to the Ministry of Lands, Agriculture, Fisheries, Water and Rural Development.

Statistics also revealed that about 18,614 ha were put under irrigated tobacco and 34,957 under dryland tobacco.

The Tobacco Industry and Marketing Board recently increased the number of licensed tobacco contractors to 42 from 39 as more merchants qualified.

Tobacco continues to rank as one of Zimbabwe’s most important non-food crops.

Zimbabwe earned $650 million during the 2022 tobacco marketing season, which closed Oct. 21. The figure was up from $589 million last year.

December 2, 2022

Voedsel Banned From Contracting Farmers

Zimbabwe’s Tobacco Industry and Marketing Board (TIMB) has banned Voedsel Tobacco International from contracting farmers this season after failing to pay farmers for two years, reports The Herald.

“Voedsel won’t be participating this year because they owe huge amounts of money to tobacco growers,” an unnamed official told The Herald.

Voedsel Director Tennyson Hwandi blamed “white-owned companies” for working against indigenous tobacco merchants.

“Big tobacco companies are being threatened by Black-owned tobacco companies, and Voedsel being one of the major players has been a target. They are determined to see us closing down,” he was quoted as saying, adding that Voedsel has already been giving its farmers inputs for the upcoming growing season.

A TIMB official said that if Voedsel was indeed issuing inputs, this would be illegal because the regulator had not licensed the company.

With buying facilities in tobacco-growing regions, including Rusape, Marondera and Karoi, Voedsel was among the major financiers of tobacco contract schemes.

Zimbabwe sold 212.7 million kg of tobacco at a value of USD650.3 million during the 2022 tobacco marketing season, compared with 211.1 million kg worth USD589.6 during the previous buying period.

November 8, 2022

Zimbabwe: More Than 12,500 Ha of Tobacco Planted

Zimbabwean tobacco growers have planted 2,107 ha of dryland tobacco to date this season, reports The Herald, citing data from the Tobacco Industry and Marketing Board (TIMB).

According to TIMB spokesperson Chelesani Tsarwe, 133,724 farmers have registered to grow tobacco this season compared to 111,063 during the same period last year.

Zimbabwe Commercial Farmers Union President Shadreck Makombe told The Herald that tobacco planting was progressing well.

“Dry land tobacco farmers have started planting especially in those areas where the rains fell,” he said. “We will see planting activities intensifying, especially as we go forward from next week onward.”

The area put under irrigated tobacco was 10,483 ha as of Nov. 1, bringing the total hectarage under tobacco to 12,590 ha.

Despite efforts to diversify into other products, tobacco remains one of Zimbabwe’s greatest generators of foreign currency.

During the 2022 tobacco marketing season, Zimbabwe earned USD650 million from tobacco sales, up from USD589 million the previous year.

November 4, 2022

Zimbabwe: Tobacco Sales Hit $650 Million

Zimbabwe earned $650 million during the 2022 tobacco marketing season, which closed Oct. 21, reports All Africa. The figure was up from $589 million last year.

In a statement announcing the end of the 2022 tobacco marketing season, the Tobacco Industry Marketing Board (TIMB) expressed delight with improved sales volumes and deliveries to auction floors.

The value of sales was up 10.3 percent over last year while volume increased 0.75 percent, according to the regulatory body.

As of Oct. 21, 2022, a total of 212,711,370 kg of tobacco had been sold compared with 211,100,219 kg sold during the same period in 2021.

“The increase in tobacco sold as well as the value is evidence of our efforts as an industry to establish a $5 billion industry by 2025,” said the TIMB.

October 31, 2022

Zimbabwe: Record Tobacco Area Expected

Industry representatives expect Zimbabwe’s tobacco farmers to plant a record hectarage of leaf this season as sales of seed soar, reports The Herald.

As of Sept. 2, 2022, at least 925 kg of tobacco seed with the capacity to cover 184,999 ha was sold, according to the Tobacco Research Board. This would be the largest hectarage ever planted if all the seed sold is sown.

Planting of irrigated tobacco began on Sept. 1, 2022, according to the Tobacco Industry and Marketing Board (TIMB). The TIMB stated that it has designed a monitoring system for contractors’ compliance to help relieve farmers’ anxiety over contract farming agreements.

“As the 2022/2023 season commences, TIMB is working toward standardizing the inputs package offered by contractors to growers,” said Chelesani Moyo, TIMB public relations officer.

“We have come up with a compliance administration framework that every registered contractor should meet. This stipulates the minimum inputs package for both small[-scale] and large-scale growers. The conditions also include the last date for inputs distribution for those who are contracted.”

“The pricing of tobacco being determined at the auction floors through a transparent system is justified as the grower is protected from any unfair pricing by the contractor who stands guided by the previous day grade price matrix obtained from the auction floors,” Moyo added.

September 7, 2022

TIMB Vows Crackdown on Side Marketing

Zimbabwe’s Tobacco Industry and Marketing Board (TIMB) vowed to crack down on side marketing, noting that five exporters lost $57 million due to the practice in 2021, according to News Day.

Side marketing is a form of contract breach in which contracted tobacco growers sell their produce to third parties in violation of an agreement to sell all their leaf to the party who provided the agricultural inputs.

“This year, 2022, the Tobacco Industry and Marketing Board is on an accelerated drive to end tobacco side-marketing. This criminal practice is responsible for the loss of millions of dollars annually and has the potential to kill the tobacco industry,” the TIMB wrote in an article published on its website.

“TIMB cannot accurately ascertain how much is lost annually since side-marketing is an illegal activity whose statistics cannot be accurately ascertained. However, in 2021 alone five exporters lost US$57 million as a result of several factors and chief among them being side marketing,” it said.

Prior to Zimbabwe’s radical land reform program in the early 2000s, most of the country’s tobacco was produced by commercials farmers who funded their own operations and sold their leaf at auction. Today’s Zimbabwean tobacco production is dominated by smallholder production and contract buying, as most of the new farmers are unable to pre-finance their crops.

In 2021, the TIMB created a special unit, the inspectorate department, to prevent, detect and investigate side marketing and other illegal activities in the tobacco industry.

July 12, 2022

Boka Tobacco Sales Suspended

Zimbabwe’s Tobacco Industry Marketing Board (TIMB) has suspended the Boka Tobacco Sales Floor (BSF) from purchasing tobacco from farmers with immediate effect, reports Africa Press.

The regulator acted on July 14 following several reports by growers that they have spent more than a month without receiving payment for their produce.

TIMB Public Affairs Officer Chelesani Moyo said the suspension will be reviewed after the BSF clears all its outstanding dues and provides proof of adequate financial resources.

“We have received several complaints from growers who have not been paid by Boka Tobacco Sales Floor after sales,” she said.

“As a regulator, we have engaged with Boka management to resolve the issue in an amicable manner.

With immediate effect, TIMB has suspended all tobacco purchases by Boka until they have cleared all outstanding payments and provided proof of adequate financial resources.”

July 11, 2022

Zim Tobacco Earnings Surpass Last Year’s

Zimbabwean tobacco growers had sold 167 million of tobacco and earned $505 million by the end of June, reports The Herald, citing statistics from the Tobacco Industry and Marketing Board.

By comparison, in the entire 2021 marketing season, farmers pocketed $504 million from the sale of 183 million kg.

While this year’s volumes are lower than in 2021, the higher quality has been commanding better prices, according to experts.

The average price for this year is $3.02 per kg while that of last season was $2.76 per kg. The lion’s share of Zimbabwean tobacco is sold under a contract system. Only 5 percent of farmers are sufficiently solvent to borrow from banks or fund their own operations.

Tobacco is a key crop for Zimbabwe, with exports and supporting activities contributing earnings of more than $1.2 billion annually.

Eager to capture more value from the golden leaf, the government aims to transform the business into a $5 billion industry by 2025. Its Tobacco Value Chain Transformation plan calls for increasing primary production to 300 million kg by 2025 and localizing financing for smallholder farmers, among other initiatives.

July 6, 2022

Zimbabwe: Contractors Succumb to Competition

Nine Zimbabwean tobacco contractors have collapsed in the past year due to cutthroat competition, according to the Tobacco Industry and Marketing Board (TIMB).

“There is a lot of competition in the contracting space in terms of pricing,” TIMB CEO Meanwell Gudu told The Zimbabwe Independent. “If a contractor does not pay the correct price, that contractor will not get tobacco. Last year, we had 42 companies, and now, we have 33. Some of them have fallen by the wayside because they could not compete.”

Once characterized by auction sales, Zimbabwe’s tobacco trade is now dominated by contract growing, with up to 96 percent of leaf tobacco being produced under agreements between buyers and farmers.

More than half of the $748 million earned by Zimbabwe’s golden leaf farmers in 2020 was pocketed by contractors, mainly big foreign corporations that repatriate the hard currency back to their countries, according to critics.

Last week, Gudu also said the TIMB was set to crack the whip on tobacco “side marketers”—buyers who illegally purchase leaf from farmers contracted with other organizations—with stiff penalties that will see offenders serving up to six month jail terms.

March 23, 2022

Tag: Tobacco Industry and Marketing Board