Published On: Thu, Aug 7th, 2014

Tobacco prices second highest globally

Zimbabwe’s tobacco prices which averaged US$3,17 per kilogram this marketing season were the second highest in the world among countries that produce the cash crop, an official said. Prices in the United States, which hovered around US$3,80 per kilogram, were the highest globally.

The southern African country, which sold an estimated 210 million kilograms of tobacco worth US$672 million this marketing season, has registered a rapid increase in the number of small-scale growers following implementation of sweeping agrarian reforms in 2 000.

Tobacco Industry and Marketing Board (TIMB) chief executive officer Dr Andrew Matibiri said Zimbabwe’s market was lucrative, in part, due to the unique taste and flavour of the country’s tobacco brand whose allure buyers cannot resist.

The Zimbabwean tobacco, he said, was of the highest quality.
“Our average tobacco prices were the second highest in the world behind those of the United States.

“This was driven by the fact that we produce a product that is full of flavour. Cigarette manufacturers are willing to pay a premium for our high quality tobacco,” said Dr Matibiri.

The soaring tobacco prices on the domestic market, said Dr Matibiri, were also propelled by the sharp increase in the number of growers.
To date, 106 456 growers have since registered to grow the crop during the 2014/ 2015 season as compared to a cumulative 91 278 farmers who produced tobacco the previous season.

“The increase in price is also very much linked to the increase in production,” he said.
Dr Matibiri dismissed reports that local tobacco growers were smuggling their crop into the region, particularly Zambia where it is reportedly fetching higher prices.

“We did our investigations regarding reports that farmers are smuggling tobacco into the region especially Zambia and we did not find any truth to that.

“There is no logic that farmers can sell their crop in Zambia where the average price is lower than the average price in Zimbabwe,” he said.
Last season, Zimbabwe raked an estimated $594 million in sales at an average price of $3,69 per kilogram.

The country’s tobacco output, which took a knock over the past decade of economic contraction, is now on a firm growth trajectory.