Zim tobacco prices decline 16% from 2013

Published: 12 March 2014

Tobacco prices in Zimbabwe, which relies on the crop as its biggest agricultural export earner, fell 16 percent from a year earlier, according to the Tobacco Industry and Marketing Board.

Leaf prices dropped to $2.87 a kilogramme from $3.42 in the prior year, Andrew Matibiri, the board's chief executive officer said today. The nation's tobacco sales season opened February 19.

"Prices started low, but have risen since sales began," Matibiri said.

Sales generated $29 million from 10.1 million kilogrammes of leaf, compared with $33.5 million from 9.8 million kilogrammes in the first 13 days of selling last year, he said.

Zimbabwe grows mainly flue-cured tobacco, also known as virginia, used to flavour high-quality cigarettes. Production shrank to less than 50 million kilogrammes, compared with a 2000 high of 236 million kilogrammes, after most white-owned, large-scale farms were occupied at the onset of the land reform programme.

The country sold 166.5 million kilogrammes of tobacco last year and may produce more this year after the number of growers rose 32 percent, Matibiri said. He said 86,000 mainly small-scale farmers registered to grow the crop, compared with 65,000 last year. Zimbabwe earned $621.1 million last year from tobacco sales. The nation sells its harvest to the likes of Richmond, Virginia-based Universal Corp. Alongside merchants from China and South Africa.

Africa and the Middle East will probably produce 415 million kilogrammes of flue-cured tobacco this year, according to estimates on Universal's website. The company says it's the world's leading leaf-tobacco merchant and processor.

- Bloomberg

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