Zim expecting good, top quality tobacco
Harare (New Ziana)- Despite reduced expected volumes, Zimbabwe is expecting good quality tobacco which should in turn attract higher prices, the industry regulator said on Wednesday.
According to the first round Crop and Livestock Assessment for the 2021-2022 season, the country’s tobacco hectarage declined by 11 percent.
Tobacco Industry and Marketing Board chief executive Meanwell Gudu told journalists that anticipated reduced volumes were likely to push the selling price of tobacco upwards.
“Due to anticipated reduced volumes in Zimbabwe this season, there will be more pressure on the demand side to take the crop, which should naturally increase prices upwards. This is likely to be experienced in the medium to filler grades,” he said.
He said top quality tobacco grades for premium brands are likely to remain unchanged ($3.5-$5.40/kg) in prices compared to last season.
“The high-end market for this grade has reached its ceiling in price increase. The major market for these grades is in China and there are no indications to change prices upwards,” he said.
Gudu said in spite of weather-related challenges facing the current farming season, the tobacco crop produced was top quality.
“We expect top quality grades. The irrigated crop is medium to heavy bodied, predominantly lemon in colour and reflecting a fair to good quality.
“The main dry land crop is medium bodied in the commercial sector whilst being light to medium bodied in the smallholder sector.
“The late dry land crop has poor stand due to prolonged dry spell which was experienced post planting time towards the end of December,” he said.
Gudu said a slight drought in Brazil, a major competitor of Zimbabwe in the global tobacco market, would also help push up demand and prices for the local crop.
“Brazil is likely to be 80 million kilogrammes short of their usual production level because of drought. This creates less competition for us,” he said.
He, however, said hoarding of tobacco might be a feature for the 2022 selling season.
“Some kind of hoarding of tobacco is likely to happen that may influence prices to be better because of disruptions in logistics caused by Covid-19.
“Supply chains were disrupted from 2020 into 2021 due to shortage of vessels and closure of some shipping lines. Now that the world has lifted the Covid-19 restrictions and uncertainty in the possibilities of other waves, customers are likely going to grab this opportunity to stock up their tobacco, thereby increasing artificial demand,” he said.
Tobacco is the country’s biggest agricultural export, and second largest single commodity export after gold, raking in around US$800 million last year.
For this season, 122 000 growers registered to grow and sell tobacco, of which 95 percent are contracted by firms.
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