Issue link: https://read.dmtmag.com/i/724263
54 tobaccoasia LEAF NEWS 烟叶新闻 Zimbabwe Tobacco Earnings Slump, Farmers Persevere Zimbabwe tobacco earnings for 2016 have slumped significantly after a severe drought that has left 4.5 million people, who represent 30% of the rural popula- tion, in need of food aid. To date, a total of 187.6 million kg (m.kg) of tobacco leaf worth $548 million has been sold compared with 189 m.kg worth $855 million sold in 2015. The four-month 2016 marketing season will end on August 5. Overall output for 2016 is expected to reach 190 m.kg against an initial target of 160 m.kg, an industry official told Xinhua Friday. Earnings, however, would suffer a significant decline and this was mainly due to poor quality crop as a result of the drought. While maintaining last year's average price of $2.94 per kg, the drought had generally reduced the quality of the crop this year thereby affecting prices, said Isheunesu Moyo, the public relations and communications manager of the Tobacco Industry and Marketing Board. He said the improved tobacco output was due to some rains received during the mid-season and improved agronomic practices by the growers. Many farmers also put their crop under irrigation and this helped to increase the crop, he said. This year, only 40,000 farmers have so far registered with the industry regulator to sell their tobacco compared to over 80,000 registered in the same period last year. Moyo, however, said the tobacco industry regulator will continue to hold trainings for farmers across the country to ensure that Zimbabwe reaches its all-time peak of 236 m.kg that was achieved in the year 2000. "We also have revolving schemes to install drip irrigation and rocket barns for tobacco farmers. This will improve quality and output," he said. Tobacco is generally Zimbabwe's largest foreign currency earner but it appears it has been surpassed this year by mining, which has already raked in $806 million from export sales in the first half of 2016. More than 50% of Zimbabwe's tobacco crop is exported to China every year. Last year, farmers produced 198.95 m.kg of tobacco pocketing over $584 million, a significant decline from 216 m.kg recorded in 2014 earning the country $684 million. Experts said the current marketing season could have been better had it not been affected by a number of challenges such as poor prices, shortages of wrapping paper, congestion and corruption by some employees at the auction floors. These have, however, been dealt with. Encouraged by the success of their flue-cured tobacco, some farmers in Manicaland have ventured into barley tobacco production. Barley tobacco, which is used for wrapping cigars, has a ready market in South Africa, Europe, Asia and Latin America. Malawi Overproduction Lowers Prices… The Tobacco Association of Malawi (TAMA) said the availability of more tobacco on the market had affected prices of the cash crop in the country, as the market principle of demand and supply had come to haunt the tobacco market in Malawi, according to a report on Malawi24. Chief Executive Officer for TAMA Graham Kunimba said due to the high supply of tobacco on the market in July, buyers are taking advantage by offering prices that are not favorable to farmers. Kunimba disclosed that the tobacco sold on auction is pegging at 92 cents per kg while tobacco being sold on contract is going at $1.45, which he said is not a good development. "The overall supply of tobacco on the market is higher than demand and this is prompting buyers to have a selective type of buying," said Kunimba. According to the TAMA boss, this year's overall average of prices is 12% lower than last year's. He further said that the variation in prices is not good for the sustainability of the tobacco business in the country. …Then El Nino Ravages Harvest Coupled with poor rainfall patterns which have seen up to half of the population of Malawians in need of food aid, the country's major forex earner, tobacco, the country's biggest export crop is now facing a tough time on the auction floors. The drought has ravaged much of southern – Africa, but Malawi has been the worst-hit country with almost half of its population of about 15 million affected. "It is common sense that this industry is on the verge of collapse. The best that can happen is for government to just ask us to stop growing this crop and diversify. For me, this year is my last. I have given up growing tobacco and I am cultivating potatoes" Said martin Douglas, a farmer. While the government has estab- lished minimum prices for the leaf, buyers continue to pay less than the stipulated auction prices. Companies have also began contract- ing individual farmers to grow and produce the crop. But some farmers say they are not making as much as they would if they took their harvest directly to the auction floors. Communications Manager for tobacco trading company Mark Ndipita said it is unlikely farmers will see much profit from tobacco this year. "This is not a good picture in terms of revenue for the government. It is not also good in terms of the income for tobacco farmers who rely their liveli- hood on tobacco. But as a country, we know the government is promoting diversification but farmers that relied much on tobacco this year will suffer a big blow," Ndipita said. Tobacco accounts for more than 60% of the southern African coun- try's exports and 15% of its gross domestic product.