Tag: Zimbabwe

  • Great Expectations

    Great Expectations

    Photos: Cavendish Lloyd

    Cavendish Lloyd has started growing low-nicotine flue-cured tobacco in Zimbabwe for shisha.

    By George Gay

    Although it’s unfashionable to say so, I believe there is something most appealing about some aspects of tobacco and the tobacco business, not least because they are naturally part of the Slow Movement. Indeed, they were part of that movement long before it came into existence in the mid-1980s with the realization that there was something to be gained in taking the time to savor certain things—and something being lost in doing things too quickly.

    For instance, though many welcome efficiencies have been introduced to the leaf tobacco business over the years, it always had about it, and still has, a comfortingly unhurried air. I mean, there is, after all, no point in a farmer, at the start of the growing season, standing over her seedlings and shouting, “ready, steady, grow!” And who in their right mind would want to walk quickly through a tobacco warehouse when he could dawdle and savor the aroma?

    Of course, not all aspects of the tobacco business are slow, nor should they be. There is a lot to be said for introducing the sorts of machinery updates and general processing efficiencies and manufacturing efficiencies covered in another story in this issue (see “The Virtuous Loop,” page 36). But, at the same time, there are other aspects of the business that have contraventions of the tenets of the Slow Movement that are to its detriment. I find it sad, for instance, to see smokers racing through their cigarettes as they stand in the cold outside pubs and offices.

    Low-nicotine Virginia flue-cured tobacco has the propensity to absorb the high levels of molasses and flavors that Shisha manufacturers require.

    Unseen Advantage

    Luckily, however, there is a type of smoking that still lends itself to savoring the moment, which comprises mainly the enjoyment of products such as fine cigars, pipes and shisha. Shisha smoking, especially, tends to be part of a relaxed social occasion, and perhaps that is why its appeal is increasing at a time when that of other combustible tobacco products is not.

    And that increase in appeal is occurring, I suspect, without too many shisha smokers realizing there is an unseen advantage in their choice of product, the tobacco component of which could have been grown in a more environmentally friendly way than that of many other tobaccos. Indeed, I, too, didn’t know of this potential environmental advantage until I corresponded recently on the subject of low-nicotine Virginia flue-cured tobacco (LNFCT) with Koen Monkau, the president of Cavendish Lloyd, and Frank Magama, the head of the Plant Breeding Division of the Tobacco Research Board’s (TRB) Kutsaga Research Station in Harare, Zimbabwe.

    Monkau told me his company was experimenting in Zimbabwe with growing LNFCT for use in shisha products, and I assumed the aim of using such tobacco was to try to wean people off smoking as is being attempted in the U.S. in the case of cigarettes. But Monkau explained that, in general, shisha manufacturers required LNFCT (less than 1 percent nicotine) mainly because of its physical characteristics. This style of leaf was pale, white-yellow and very thin, he said, and it had the propensity to absorb the high levels of molasses and flavors that needed to be added to it.

    But this style of leaf also has a number of advantages when it comes to the environment and the cost of producing it, partly because it is closer grown than is standard flue-cured tobacco and partly because of a major reduction in the need for chemical applications. Magama told me it was expected that LNFCT would have lower costs of production with significant savings being made from reductions in the use of fertilizer and the cutting out altogether of systemic and contact suckercide applications. Labor savings would be made because topping would not be required, something that normally involved making several rounds of a crop. And energy and time savings would be made on curing the resultant thinner and smaller leaves.

    At the time of this writing, Cavendish Lloyd was in the process of grading its first trial crop of LNFCT.

    Growing Trials

    Cavendish Lloyd was established in 2011 by Monkau, who has been involved in tobacco for more than 25 years, and his wife, Jiayu Wang, who is vice president of the company. The company’s largest operation in respect of staff numbers is to be found in Zimbabwe, but it operates in the Far East, the Middle East and Europe as well as in other parts of Africa. Overall, it has about 100 employees. It is active throughout the tobacco chain, from the growing of tobacco to the marketing and distribution of cigarettes, though, currently, it does not directly operate any leaf processing or tobacco manufacturing facilities—or, I should point out, offer Cavendish tobacco. It is the exclusive distributor of KT&G products in Zimbabwe.

    Given the company’s close association with Zimbabwe, and the country’s favorable climatic and soil conditions, it is not surprising that this is where Monkau is currently conducting, in conjunction with Magama’s team, LNFCT growing trials and where he intends to expand into larger scale production during the next season, which will run from later this year into next year. And it is not surprising, either, that Magama shares this enthusiasm for Zimbabwe. He told me in an email exchange that he believed there was a combination of factors that made Zimbabwe a suitable country for growing LNFCT, including its resilient grower base, the presence of supportive merchants, a long tradition of growing the crop, and soils that were inherently low in nitrogen, which allowed growers to have good control of plant nutrition when producing LNFCT.

    Asked whether LNFCT varieties were more or less difficult to grow than traditional varieties, Magama said that both required the same attention to detail and good management, though, in the case of LNFCT, some key agronomic practices had to be modified, owing, for example, to the previously mentioned need for less fertilizer and the absence of topping. He added that there was so far no clear evidence about whether it was better to grow LNFCT in the dry lands or as irrigated crops, but he said it was important to note that excessive irrigation or precipitation limited growth and nicotine accumulation through leaching of nitrogen while excessively dry conditions resulted in high nicotine accumulation. Much of the year-to-year variation in nicotine content in a variety was due to differences in rainfall, with everything else being equal.

    At the time of writing, Cavendish Lloyd was in the process of grading its first trial crop of LNFCT, which was grown during the 2021–2022 season by a farmer operating near Marondera, Mashonaland East, and with the help of the Kutsaga team. But it has ambitions to quickly increase its production of LNFCT in Zimbabwe, and it aims, eventually, to become a major player in LNFCT by expanding production into Zambia, Malawi and South Africa.

    Koen Monkau (left) created Cavendish Lloyd in 2011.

    Exponential Growth

    Monkau believes that central and southern Africa can provide significant volumes of LNFCT at competitive prices. And, importantly, having done his research, he believes there is a ready market for such tobaccos. “Within the tobacco market at large, there are some segments that are in decline or stable and other segments that are growing fast,” he told me in an email exchange. “The shisha market is definitely in the last category, with even exponential growth expected in the next few years.”

    Given such opportunities come to fruition, it seems likely that other players will be attracted to growing LNFCT in Zimbabwe, a fact Monkau hinted at when he made the point that establishing an LNFCT production industry in Zimbabwe would be an important step in helping to expand and diversify the country’s tobacco client portfolio.

    Currently, no other companies are growing low-nicotine varieties in Zimbabwe or taking part in production trials. However, it seems that interest is growing. Magama told me the TRB had been involved with low-nicotine trials for the past five years, working with many merchants with different objectives and end-use applications. And the board had been selected, he said, to be part of a three-year global study on low-nicotine tobacco being coordinated by a taskforce of the Cooperation Centre for Scientific Research Relative to Tobacco.

    The plant breeding division of the TRB plays a vital role in low-nicotine trials, conducting research and making available where appropriate the results of that research. The division also makes recommendations when called upon to do so by the Tobacco Industry and Marketing Board (TIMB) and other stakeholders. Again, such cooperation is vital because the TIMB is responsible for authorizing the growing in Zimbabwe of any tobacco variety, and it is the TRB that carries out value for cultivation and use studies, and, on the basis of those studies, recommends or not the variety in question.

    Furthermore, two other government departments, the Seed Services Institute and the Plant Quarantine Services Institute, are involved in ensuring only suitable varieties are grown by processing seed permits and ensuring all phytosanitary issues from the country of origin are addressed before seed importation is made.

    It might seem from the above that obtaining permission for experimenting with new varieties would be complex, but, for instance, authorization for the seed used for Cavendish Lloyd’s trials was processed for the company by the TRB.

    The seed in question was obtained from a company based in Europe that has long cooperated with Zimbabwe and is a stable source of supply. But, in any case, Magama said that, depending on the results of the trial, it was possible seed could be sourced elsewhere if it were necessary to address limitations the original seed might have. Further, local breeding efforts could be activated should there be a business case for this nascent tobacco type, he added.

    Finally, without wishing to interrupt the Slow Movement that inevitably controls the scheduling of research and trials, I need to point out that Monkau intends to introduce some allegro con brio into his enterprise. “We plan to grow 1 million kg green from season 2022–2023,” he said. “This might seem ambitious, but we have spent a lot of time on research and are confident we can make it.”

  • Mixed Sentiments as Markets Open in Africa

    Mixed Sentiments as Markets Open in Africa

    Photo: Taco Tuinstra

    Farmers earned more than $243,500 from the sale of 94,453 kg of flue-cured tobacco on the first day of Zimbabwe’s 2022 marketing season, reports The Herald. This reflects a 40.54 percent increase over previous year when growers earned $173,256 from 92,106 kg on the first day of sales.

    On the first day of the 2022 marketing season the average price was $2.58 per kg, compared with $1.88 on the first day of 2021, according to the Tobacco Industry and Marketing Board (TIMB).

    TIMB Chief Execute Meanwell Gudu said prices are expected to be firm this year due to reduced volumes.

    “Brazil is likely to be 80 million kg short of their usual production level because of drought. This creates less competition for us. India has fixed its 2021-2022 production of flue-cured Virginia up to 270 million kg, against 236 million kg in the previous year,” he said.

    “Due to anticipated reduced volumes in Zimbabwe this season, there will be more pressure on the demand side to take the crop, which should naturally increase prices upwards. This is likely to be experienced in the medium to filler grades.”

    Farmers in Malawi, meanwhile, were dissapointed with their earnings, with some asking President Lazarus Chakwera to intervene, according to The Nyasa Times.

    On April 1, the highest price offered on the auction floor was $1.75 per kg and the highest offer on the contract market was $2.30.

    Chakwera assured the farmers that the government would intervene. However, he also advised them to grade their tobacco properly to satisfy buyers’ requirement.

    According to the Tobacco Control Commission there were more than 1,000 bales on the Lilongwe Auction Floors on the first day of the 2022 tobacco marketing season.

  • Zimbabwe: Farmers Reject Local Currency

    Zimbabwe: Farmers Reject Local Currency

    Photo: Taco Tuinstra

    Tobacco farmers in Zimbabwe have requested to receive 100 percent of their proceeds in U.S. dollars as opposed to partially in foreign currency and partially in local currency, reports The Independent. The farmers cited input costs rising due to high inflation and exchange rate volatilities.

    The Reserve Bank of Zimbabwe said that tobacco farmers would be paid 75 percent of their sales proceeds in foreign currency. The remaining 25 percent would be paid in the local currency, converted at the prevailing auction exchange rate on the day of sale.

    “Expectations are that we retain 100 percent United States dollars (USD). Input costs were very high. Everything was paid in USD, including labor,” Commercial Farmers Union of Zimbabwe President Shadreck Makombe said.

    “Contractors need to improve funding per hectare. The dry spell has affected most late crops, and most farmers will have challenges in repaying loans.”

    The Zimbabwe Tobacco Association (ZTA) said in its latest newsletter that the forex retention level of 75 percent “will sadly negate all the anticipated positives for the season, hence diversification and identification of alternate crops to tobacco remains key for all growers.”

    “Demand for Zimbabwe’s flavor tobacco remains very high. However, it is poor, inconsistent monetary policies that are hurting the local industry and impeding its growth,” the ZTA said.

    “We have had a situation last year where contractors failed to pay farmers,” said George Seremwe, president of the ZTA. “To date, some of the farmers have not been paid. We do not expect that situation to happen. We don’t expect the same contractors to be buying tobacco this season until they fulfill last year’s obligations.”

    “We expect the grading and pricing system to be uniform. We cannot have one contractor paying one grade higher than the other. We want that to be addressed as well.”

    The marketing season officially begins on March 30.

  • Zimbabwe: Contractors Succumb to Competition

    Zimbabwe: Contractors Succumb to Competition

    Photo: Taco Tuinstra

    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.

  • Zimbabwe Trade Gears up for Selling Season

    Zimbabwe Trade Gears up for Selling Season

    Photo: Taco Tuinstra

    Zimbabwe’s tobacco auctions are set to open on March 30, with all three auction floors prepared to follow Covid-19 protocols, reports All Africa.

    Majority of sales will take place through contract floors while auction floors will cover 5 percent of sales.

    Prices are expected to be firm. Due to the rainfall, output of the crop is expected to be down 15 percent, according to New Zimbabwe.

    Tobacco leaf has a capacity of earning $15 billion per year for Zimbabwe, according to Bulawayo 24 News, but the country is currently only bringing in $900 million.

    Tobacco Industry and Marketing Board CEO Meanwell Gudu stated that there’s a need to invest in value addition for the industry and country to fully benefit from the crop and that sustainability issues could affect the markets if not adhered to.

  • Zimbabwe to Crack Down on Side Marketing

    Zimbabwe to Crack Down on Side Marketing

    Photo: Taco Tuinstra

    Zimbabwe’s Tobacco Industry and Marketing Board (TIMB) is cracking down on the side marketing of tobacco leaf during the 2022 selling season, according to The Sunday Mail.

    “We have engaged relevant authorities to come up with a Statutory Instrument (SI) on side marketing,” said Saviour Muvirimi, TIMB head of inspectorate. “We also recruited informers in all farming areas in order to receive information on the presence of illegal buyers in communities.”

    Police would be brought in to arrest those caught side marketing, according to Muvirimi. “TIMB will be making constant radar sweeps on frequency of sales on grower numbers with the view to identify grower numbers perpetuating side marketing. Respective individuals will be called to explain these sales, and if we are not convinced, we will block and suspend the grower numbers and refer such criminal elements to the Zimbabwe Republic Police for arrest.”

    “Farmers who side market tobacco actually play around statistics by adjusting estimates,” he said, adding that the police department would be strict on addressing adjustment of estimates by farmers.

    “TIMB will not hesitate to suspend sales and revoke licenses from contractors involved in side marketing. (We will) increase our surveillance patrols in farming communities in order to identify makorokoza’s (dealers) and errant licensed contractors engaging themselves in side marketing,” Muvirimi said.

  • Zimbabwe: Good Quality Leaf Expected

    Zimbabwe: Good Quality Leaf Expected

    Photo: Taco Tuinstra

    Zimbabwe is expecting good quality tobacco leaf this year despite an expected reduction in output. The quality should attract higher prices, according to xinhuanet.com.

    The anticipated reduced volumes are likely to push demand and selling price up, according to Tobacco Industry and Marketing Board Chief Executive Meanwell Gudu.

    Tobacco hectarage for the season declined by 11 percent, according to results of the first-round crop and livestock survey for 2021–2022.

    “Due to anticipated reduced volumes in Zimbabwe this season, there will be more pressure on the demand side to take the crop, which should naturally increase prices upward. This is likely to be experienced in the medium to filler grades,” Gudu said. Top-quality grades for premium brands are likely to remain unchanged, he said. The current price for top-quality grades ranges from $3.50 to $5.40 per kg.

    “The high-end market for this grade has reached its ceiling in price increase. The major market for these grades is in China, and there are no indications to change prices upward,” Gudu said.

    “We expect top-quality grades. The irrigated crop is medium[-bodied] to heavy-bodied, predominantly lemon in color and reflecting a fair to good quality.

    “The main dryland crop is medium-bodied in the commercial sector whilst being light[-bodied] to medium-bodied in the smallholder sector. The late dryland crop has poor stand due to prolonged dry spell, which was experienced post-planting time toward the end of December.”

    “Brazil is likely to be 80 million kg short of their usual production level because of drought. This creates less competition for us,” Gudu said.

    “Some kind of hoarding of tobacco is likely to happen that may influence prices to be better because of disruptions in logistics caused by Covid-19,” he added.

    “Supply chains were disrupted from 2020 into 2021 due to shortage of vessels and closure of some shipping lines. Now that the world has lifted the Covid-19 restrictions and uncertainty in the possibilities of other waves, customers are likely going to grab this opportunity to stock up their tobacco, thereby increasing artificial demand,” Gudu said.

    Zimbabwe sold 186.6 million kg of tobacco leaf valued at $515.9 million during the 2021 marketing season, up 16.8 percent in volume and 31 percent in value over 2020 sales.

  • Zimbabwe: New Tobacco Floor

    Zimbabwe: New Tobacco Floor

    Photo: Taco Tuinstra

    Ethical Leaf Tobacco has opened an auction floor in Mvurwi, according to allAfrica. Farmers in Mvurwi used to travel to Bindura for auction.

    Patience Mushore-Chizodza, public relations and marketing manager for Ethical Leaf Tobacco, said the company expects to buy 5 million kg of tobacco, up from 4.6 million kg last year.

    “We have adopted a paradigm shift and embraced social marketing through various strategies to empower smallholder tobacco farmers,” Mushore-Chizodza said. “This year, the company has embarked on a plough back initiative in all our four tobacco farming regions by recognizing the best farmers who have shown vigilance and best farming practices.”

    Wonder Matizamhuka, Tobacco Industry and Marketing Board technical officer for Mvurwi, warned farmers against side marketing as the start of the season gets closer. “As tobacco floors open on March 31, sell your crop to the company that contracted you,” he said. “Side marketing is a crime, and this year, we will be arresting people.

    “Don’t look for middlemen at tobacco floors; a good crop sells itself. Unscrupulous people moving in farms buying your crop are ripping you off. Go with your tobacco to the floors.”

    Zimbabwe decentralized tobacco marketing to minimize movements in the wake of the coronavirus pandemic.

  • Zimbabwe Marketing Dates Announced

    Zimbabwe Marketing Dates Announced

    Photo: Taco Tuinstra

    The Zimbabwe Tobacco Industry and Marketing Board (TIMB) has announced the opening dates for auction and contract floors for the 2022 season, according to ZBC News.

    “The TIMB wishes to inform all stakeholders that the 2022 tobacco marketing season kicks off on the 30th of March 2022 for auction floors and Thursday, the 31st of March for contract floors,” said Chelisani Moyo, spokesperson for the TIMB.

     “We registered 122,000 farmers for this season compared to 145,000 last season, mainly due to the fact that TIMB has come up with a framework to bring sanity in the industry to ensure that proper farmers are the ones who are registered,” he added.

     The number of registered Class A buyers has increased to 33 from 28 in 2021.

    Over the past two years, sales have been conducted under strict Covid-19 protocols, and the TIMB is currently conducting crop assessment with the parastatal set to issue the sales guidelines before the marketing season starts.

  • Voedsel To Set Up Leaf-Processing Plant

    Voedsel To Set Up Leaf-Processing Plant

    Photo: Taco Tuinstra

    Voedsel Tobacco International will set up a $6 million leaf-processing plant in Rusape, Zimbabwe, this year, reports Bulls n Bears.

     “We have purchased the material to set up a tobacco-processing plant for the value addition of tobacco,” said Voedsel’s commercial director, Tennyson Hwandi.

    “This process involves beneficiating the tobacco from its state into a semi-finished product. It also means that there is going to be more earnings for the farmers as we grow the value chain. As an indigenous company, we are proud to have achieved this as this creates new jobs.”

     Hwandi said the plant is expected to start operations this year.

     Voedsel’s investment is in line with the government’s Tobacco Transformation Plan, which aims to grow the Zimbabwean tobacco industry to $5 billion by 2023 by increasing the level of value-added tobacco to 30 percent from the current 2 percent.