China continues to dominate tobacco exports

CHINA continues to dominate the country’s tobacco exports, as the Asian country has so far purchased 20,2 million kilogrammes (kg) of the crop valued at $167,4 million for an average price of $8,11/kg followed by South Africa which spent $26,2 million on nine million kg at an average price of $2,90 per kg.

Figures released by the Tobacco Industry and Marketing Board (TIMB) indicate up to day 68, which closed on July 6, 2016, the country earned a total of $253,6 million from the export of 45,1 kg million of flue-cured tobacco. The development is expected to ease liquidity challenges in the country, as cash shortages have become the order of the day in recent months.

TIMB data also indicates that 40 countries bought the golden leaf, but the current export earnings and volumes are higher than prior year comparable figures, given that for the same period last year, 42,3 million kg had been exported at $246,6  million at an average price of $5,82 per kg.

In the rankings, Indonesia is currently standing at third place after purchasing 2,2 million kg valued at $11,7 million at an average price of $5,21/kg, with Belgium buying 2,2 million kg for $11,1 million at an average price of $4,93/kg. Russia purchased 2,1 million kg at an average price of $3,25 per kg, thereby spending $7 million on the crop. The United Arab Emirates bought 1,8 million kg, at $2,64 per kg, spending $4,9 million.

Last year, 205,5 million kg of tobacco were sold, earning $651,9 million, the biggest sale in 13 years. Meanwhile, tobacco auction sales for 2016 amounted to $31,3 million kg after the floors recorded $81 million in sales at an average of $2,59 as contract sales stood at 134 million kg at $3/kg raking as over $400 million was recorded in sales since the opening of the current marketing season.

The current seasonal sales at 165,3 million kg are 5,3 percent above 2015 auction output, with $485,8 million having been realised from the sales thus far. While the lowest price that has been recorded so far is $0, 10 per kg, the number of bales that have been rejected decreased 15 percent to 143 580 from 169 761 in 2015, due to improved quality of the crop.

The traditional February start of the sales season was delayed due to an El Nino-induced drought, which prompted TIMB to predict a smaller harvest. At the turn of the millenium, Zimbabwe was the second-largest exporter of flue-cured tobacco — a high-quality, lucrative crop — but the sector’s fortunes reversed suddenly with the controversial land reform aimed at addressing colonial land imbalances, with upheaval from the programme devastating the country’s agricultural sector.

However, steady gains by black Zimbabwean tobacco farmers have raised production of the crop closer to pre-reform levels and may help salvage the country’s struggling export sector. Agriculture experts say more Zimbabweans seem to be shifting from maize production to tobacco due to its better income generation.
The majority of the farmers are under contract farming and this has seen many foreign companies, enter into farming deals with local growers who cannot afford inputs and others costs.

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