Agric Review: Tobacco poised for big forex earnings this year

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The golden leaf is set to reel in some gold level earnings this year based on the amount of the commodity that has been sold on various auction floors across the country so far.

In the first five days of this year’s tobacco selling season, 2 468 113 kgs were sold against 218 492kgs in 2020. This represents a 1030 percent surge between what was sold last year and what has been sold this year

On top of a surge in the volumes of tobacco that have been presented to the Tobacco Industry and Marketing Board (TIMB) so far, the price of the commodity has also scaled up.

The first bale of the season sold at US$4.30 per kg which was higher than the US$4 that was offered last year, while the average for all the produce that was sold in the first five days of this year’s selling season was US$2.12 per kg against US$1.74 per kg that was posted last year

Complementarily, the rejection rate at auction floors dropped by 2.2 percentage points from an average of 12 percent in the first five days of the 2020 selling season to 9.8 percent this year. This is indicative of a better-quality yield having been produced by farmers this season.

The Zimbabwean government has pegged economic growth for the year at 7.4 percent, a projection based on a good agricultural season as a result of the above normal rainfall received in the country this season and of all the agricultural products with economy shifting power, tobacco is at the very top.

Despite slumping in foreign currency earnings last year, the golden leaf remained one of the country’s top exports.

Export earnings from tobacco at US$713,8 million were down 5,7 percent in 2020 from the 2019 figure of US$756,8 million, possibly affected by COVID-19 induced lockdown which thoroughly affected the selling season and drought which plagued the nation.

This year however, if the figures from the first five days are anything to bet on, foreign currency earnings for the country from tobacco are not going to be anything less than a billion U.S dollars.

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