Zimbabwe - Tobacco Reporter

Cigarette Manufacturing to Increase

A cigarette manufacturing plant is under construction in Zimbabwe, with the expectation that it will increase manufacturing capacity by 50 percent, reports The Herald.

“(The) Cabinet would like to report that the value of local tobacco purchased has increased from $650 million in 2022 to $897 million in 2023,” said Jenfan Muswere, minister of information, publicity and broadcasting services. “Out of this amount, tobacco purchases using local financing were $61.4 million in 2022 and $73.2 million in 2023. For the 2024 tobacco marketing season, the recorded intentions for local financing amount to $81 million.”

“There are opportunities to increase the level of value addition and beneficiation of tobacco into cut rag and production of cigarettes, from 2 percent of total tobacco produced to 30 percent,” said Muswere. “Currently, seven cigarette manufacturers operate in Zimbabwe, with a combined production capacity of around 5 billion cigarette sticks per annum.

“An additional cigarette manufacturing plant is under construction, with a current production of 1.6 billion sticks per year. The plant will increase capacity by 50 percent in the first half of 2024.”

March 21, 2024

Sales Reach $13 Million as Season Starts

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.”

March 19, 2024

Call for Climate-Proof Agriculture in Zimbabwe

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.

March 14, 2024

Zimbabwe Tobacco Season Opens

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.”

March 13, 2024

Zimbabwe Crop Down 10 Percent

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.

March 13, 2024

TIMB Licenses 32 Contractors

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.

March 11, 2024

Zimbabwean Growers Urged to Grade Properly

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.

March 5, 2024

Zimbabwean Shisha Production Set to Triple

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”).

February 27, 2024

Zimbabwe Prepares for Marketing Season

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.

February 20, 2024

Zimbabwe Markets to Open March 13

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.

February 7, 2024

Tag: Zimbabwe