Prices heading south
The spectacular growth of Zimbabwean tobacco production has prompted Mashonaland Tobacco Co. to reopen its processing facility.
During the first 56 days of flue-cured tobacco sales in Zimbabwe, the average price paid to growers increased by US$0.01 per kg, or about 0.3 percent, according to a story in The Sunday Mail.
After 52 days of sales, according to a previous story in the Zimbabwe Herald, the average price was up by US$0.02 per kg, or about 0.7 percent; so, as far as growers are concerned, the situation is going backwards.
The full-season average paid to growers has not increased for more than 20 years and seems unlikely to do so this year. The average price after 56 days is lower than the full-season average for 2017.
And growers have delivered 190 million kg already, the same amount as they delivered during the full-season 2017 market.
And whereas, for the third time since 2010, they are expected to deliver more than 200 million kg, the Tobacco Industry and Marketing Board (TIMB) seems not to be expecting the total to go far above 200 million kg, even though, officially, there are more than 50 sales days to go.
“There’s a big likelihood that the country may surpass the 200 million kg targeted by Treasury given the amount of tobacco that has been delivered to the auction floors,” said Isheunesu Moyo, the TIMB’s public relations manager.
“We are surprised with the statistics given dry climatic conditions that we have experienced mid-season. The second half rains during end of January changed the course of the season for most tobacco farmers who were heading for total disaster.”
Of the 190 million kg delivered so far, more than 161 million kg were the subject of contracts.
The Mail reported that the average price had increased from US$2.90 per kg last year to US$2.91 per kg this year.
Growers were said to have earned ‘more than US$551 million in the first 56 days of the marketing season, [up] from US$440 million last year’. The amount of tobacco delivered during the two seasons was not mentioned.
The number of growers, however, was said to have risen from 98,705 ‘in the past year’ to 144,905. If the figure of 98,705 referred to last season, the average income per grower has fallen from US$4,458 in 2017 to US$3,802 this year, a drop of nearly 15 percent.