Tobacco prices have fallen by an average of US 14 cents in the wake of a new pricing structure growers say.
The new tobacco marketing season opened with prices ranging from US$1,59 per kilogramme for the lowest tobacco grade to US$4,65 per kilogramme for the highest grade.
As of last Thursday, a total of 143 million kilogrammes of tobacco had been sold, generating US$488 million in revenue at an average price of US$3,40 per kg.
In 2024, the country exported over 260 million kg of tobacco, generating approximately US$800 million.
Expectations were high that at least 300 million kgs of tobacco would be sold this year, but the target has since been revised downwards to 280 million kgs due to the El Niño-induced drought of the 2023/24 season.
“The 2025 tobacco marketing season is in full swing, with steady deliveries at both auction and contract floors.
“So far, the marketing process has been orderly, characterised by competitive pricing,” Tobacco Industry Marketing Board (TIMB) public affairs specialist Chelesani Tsarwe told Standardbusiness.
“As of May 6, 2025, a total of 143 million kilogrammes of tobacco have been sold, generating US$488 million in revenue.
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“The average price is US$3,40 per kilogramme, down from US$3,54 during the same period last year.”
Tsarwe said the new pricing structure was no longer determined solely by auction floor averages.
“The floor price is no longer determined solely by auction floor average prices, but is now based on a weighted average across all market segments,” she said.
“Additionally, it’s important to clarify that the previous pricing arrangement using auction floor averages was not established through a statutory instrument (SI), but rather through a contractual Memorandum of Understanding (MoU).”
She said those confused about the process should seek proper engagement to fully understand the current framework before making statements that could mislead stakeholders.
Tsarwe was referring to a press statement by Tobacco Farming Talk (TFT), a local platform where various issues that affect tobacco farmers are discussed.
TFT had expressed concerns regarding recent pricing fluctuations, stating that prices initially adhered to the guidelines of SI 61 of 2004, which governs fair tobacco pricing under the contract system.
“At the start of the 2025 tobacco selling season, nearly all contracting companies aligned with the auction price benchmark,” TFT said.
“ However, as the season progressed, this alignment has drastically shifted, with many contract prices now significantly below the auction price.”
It said that though the difference was small, it masked much deeper discrepancies when company-level data was considered.
TFT predicted estimated grower losses due to under-pricing of this year’s crop.
“Using available data, we estimated the potential financial impact on growers from contract prices falling below the legal benchmark to a total potential grower loss of over US$22,5 million,” TFT said.
“This means growers are receiving millions of dollars less than what would have been paid if SI-compliant prices were applied across the board.”
Zimbabwe Commercial Farmers Union president Shadreck Makombe said the drop in prices was normal.
“It is normal to have a price drop as the market is firming up with better styles up in sales; buyers now have a wider choice,” he said.
TIMB had assured tobacco farmers that they would receive payments within 48 hours of sale, but reports indicate some farmers are facing delays.
