Tobacco output to rise 8%

BY FIDELITY MHLANGA

ZIMBABWE’s tobacco output will rise by 8% to 200 million kilogrammes (kg) during the 2020/2021 marketing season, riding on good rains, experts said last week.
Output was estimated at 184 million kg last season, according to Tobacco Industry Marketing Board (TIMB) statistics.

However, this was a drop from 258 million kg the previous season.

The Meteorological Services Department has predicted normal to above normal rainfall across Zimbabwe throughout the 2020/2021 cropping season, except for region 2wo.

“The expected tobacco output is between 170 million kg and 200 million kg,” Tobacco Association of Zimbabwe president George Seremwe told Standard Business.
“The crop is fairly good though we had too much rain in some areas. Tobacco doesn’t do well with too much rain,” he said.

Seremwe warned that excessive rains might affect the crop through wilting, leaching and fast ripening.

He said farmers must apply calcium and properly drain their fields.

During the 2019/2020 season, farmers reeled from an official fixed exchange rate of US$1:$25, which eroded their earnings for a better part of the marketing season before authorities moved to shift the monetary policy in June.

Farmers were getting 50% of their earnings at the US$1:$25 interbank rate fixed by the central bank at the time, and would go on to purchase foreign currency at the parallel market, where rates were as high as US$1:$125.

The other 50% was paid out in foreign currency.

Experts said the losses that farmers suffered at the beginning of the marketing season could explain why fewer of them have signed up this year.

The Reserve Bank of Zimbabwe has replaced the interbank market with a weekly foreign exchange auction system, which started in June.

But this was after 60% of the crop had been shipped to the market.

Economist Takudzwa Chisango said 200 million kg may not be achieved.

“I think 200 million kg is somewhat unachievable largely on account of huge exchange rate losses most farmers incurred on during the 2020 marketing season,” Chisango said.

“A great chunk of tobacco was sold using an exchange rate of US$1: $25 as this was before operationalisation of the forex auction system. As a result of these exchange rate losses, most farmers were left incapacitated to increase their production due to very limited working capital,” he said.

According to the latest TIMB report, 1 703 new farmers have signed up to grow the golden leaf this season.

The TIMB says contract growers constitute 96% of those who had indicated that they would be planting tobacco.

However, the area under tobacco increased to 28 292 hectares, from 27 181 hectares last year, according to the TIMB, which has already rolled out its inputs credit scheme that helps farmers plant the crop.

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