Zimbabwe Tobacco Association AGM

The Zimbabwe Tobacco Association recently held its 58th annual congress. Outgoing ZTA chairman, Steve Swanepoel, addressed the Congress and outlined major issues still

affecting this sector as:

Increased pressures on growers’ viability. Tobacco prices declined in real terms by 23.7% from 2013 to 2017 and have remained static this year. “Although the trade acknowledges a better quality crop this season, the oversupply situation has naturally caused the demand to drop off, leading to a reduction in prices. “Add to this the foreign currency and cash liquidity shortages resulting in a multi tier pricing system with huge increases in costs per hectare, viability becomes even more of an issue. Thus, increased pressures are being put on yield and desired quality to remain in business”.

Environmental degradation. Happening at an “unprecedented rate” in Zimbabwe, the Sustainable Afforestation Association of Zimbabwe (SAAZ), and a few other concerned parties are trying to do their part in halting this, but it is a drop in the ocean compared to the destruction and unsustainable utilisation of our environment. Small scale councillors at council meetings highlight their concerns over the shortage of firewood and rapid depletion of forest areas with insufficient replanting

taking place. Drastic action by the tobacco merchants to force the usage of coal and legislation restricting deforestation by government needs to be put into place to save the remaining natural woodlands. “The alternative, turning Zimbabwe’s agricultural areas into a desert, is

simply not acceptable,” Swanepoel said.

Regulatory body controls and effectiveness thereof. Regulation of any industry is important in

ensuring a balanced market environment for the buyer and seller. Many of the regulations governing our industry are being ignored at the expense of the grower. Uncultivated areas are being cleared with no good agriculture or soil conservation practices being ignored. Stalk destruction is not being done on many farms, with the Potato Virus Y outbreak this year almost having the potential to write off a large portion of the crop. There are hundreds of hectares of stalks still standing with little being done by Plant Quarantine to punish the offenders.

Land tenure. The promised future of land tenure in the form of 99-year leases needs to be fast tracked in order for the farmers to access funding in the traditional way from the banking sector. This alone will create huge local investment and generate unprecedented growth. The control of the industry by contractors, being the financier, input provider, judge, jury and executioner of many of the farmers is not a healthy position, and this is exacerbated by the control of the critical foreign currency needed to keep the primary producers’ costs down and remain competitive.

Swanepoel did, however, acknowledge the role the contractor has played since land reform by supporting the grower in the absence of accessible funding without which the tobacco industry would have collapsed.

Swanepoel is succeeded by Warren Gillwald.

Tobacco Sales Figures and Summary

According to latest flue cured tobacco sales reports, the total volume of tobacco sold this season surpassed 243 million kg and fetched over $710 million. This exceeds the previous crop record of 236 million kg (achieved in 2000).

This year’s crop value was 33% higher than last year’s. In 2017, the crop value reached $533,519,691.

The volume of tobacco sold to date through the three floors (TSL, Boka and Premier), accounts for 14% of total sold to date (35,642,291kg). The remaining tobacco (207,599,496 kg) was sold to contract buyers.

Tobacco Industry and Marketing Board (TIMB) statistics record the average price for this selling season as $2.92, which is slightly lower than last year’s average price of $2.96.

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