Tobacco production in million kg and average US$ prices
Sources: TIMB, Equity Axis Research
- Zimbabwe's tobacco production surpasses 300 million kilograms, generating over $1 billion in revenue
The country aims to produce 425 million kilograms, valued at $1.615 billion, by the end of the 2025 selling season
Contract farming has driven the industry's recovery, but inequities in the model threaten small-scale farmers' livelihoods
Harare- Zimbabwe’s tobacco industry has achieved a historic milestone in 2025, surpassing 300 million kilograms of production, generating over US$1 billion in revenue by June 19, 2025 according to TIMB.
This achievement highlights the sector’s critical role in Zimbabwe’s economy, contributing significantly to GDP and foreign exchange earnings.
This piece traces the industry’s evolution from robust growth in the 1980s and 1990s, a sharp decline in the 2000s due to land reforms, and a resilient recovery driven by contract farming. It examines Zimbabwe’s position relative to global and regional tobacco powerhouses, identifies key buyers, and proposes strategies to maximise benefits for small-scale farmers while addressing inequities in the contract farming model that threaten to overshadow this triumph.
The 2025 Milestone and Projections
As of day 72 of the 2025 selling season (June 19, 2025), Zimbabwe recorded 306.25 million kilograms of tobacco sold, generating $1.028 billion at an average price of $3.36/kg, surpassing the Tobacco Value Chain Transformation Plan’s 300 million kilogram target.
With the selling season typically spanning 120–140 days, projections suggest significant growth by its close. Based on 2024’s performance of 296 million kilograms sold over 130 days for $1.3 billion and 2025’s current trajectory, we estimate final production and revenue to be much higher.
In 2024, daily sales averaged approximately 2.28 million kilograms with an average prize of = $4.39/kg. In 2025, through day 72, daily sales averaged 4.25 million kilograms reflecting higher output and a slightly lower price of $3.36/kg. Assuming sales continue at this rate for the remaining 48–68 days (to reach days 120–140), additional production could range from 204 million to 289 million kilograms, totalling 510.25–595.25 million kilograms.
However, historical trends suggest sales taper off later in the season. Adjusting for a conservative 50% reduction in daily sales (2.125 million kg/day), additional production would be 102–136 million kilograms, yielding a total of 408.25–442.25 million kilograms.
Revenue projections depend on price stability. At $3.36/kg, 408.25–442.25 million kilograms would generate $1.372–$1.486 billion. If prices align closer to 2024’s $4.39/kg due to late-season quality improvements, earnings could reach $1.792–$1.941 billion. Given global demand and TIMB’s reported price stability, a midpoint projection of 425 million kilograms at $3.80/kg (averaging 2025 and 2024 prices) is plausible, yielding approximately $1.615 billion.
This projection aligns with estimates of $1.5 billion as a record-breaking low, with $2 billion feasible if high-quality sales and prices surge late in the season. This milestone reflects strategic investments, improved techniques, and robust demand, particularly from China, but reliance on contract farming raises concerns about equitable benefits for the 110,000+ small-scale farmers driving this success.
Historical Evolution
The industry’s roots lie in the 1980s, when large-scale white farmers, controlling nearly half of Zimbabwe’s arable land due to colonial policies, drove production from 125 million kilograms in 1980 to 130 million by 1989. The Lancaster House Agreement preserved these structures, enabling growth to a peak of 260 million kilograms in 1998, cementing Zimbabwe’s status as Africa’s leading exporter of flue-cured Virginia tobacco, priced globally for its quality.
The Fast Track Land Reform Programme of 2000, aimed at addressing land inequities, disrupted this trajectory. Production plummeted to 48 million kilograms by 2008, 21% of 2000’s 228 million kilograms as new farmers lacked experience, credit, and supply chains. By 2013, 110,000 small-scale farmers produced 65% of the crop, compared to 1,500 large-scale farmers in 2000.
Recovery began in 2005 with contract farming, led by firms like British American Tobacco and China Tobacco, providing inputs and markets. By 2016, 80% of tobacco was contract-grown, with production rebounding to 258 million kilograms by 2018.
Revenue grew steadily: $0.8 billion in 2021, $0.9 billion in 2022, $1.2 billion in 2023, and $1.3 billion in 2024. The 2025 milestone we project at 425 million kilograms and $1.615 billion represents the pinnacle of this recovery, driven by China’s demand and government initiatives like the Tobacco Value Chain Transformation Plan.
Globally, China leads tobacco production with 2.19 million metric tonnes in 2022, followed by India (0.8 million) and Brazil (0.7 million), benefiting from scale and technology.
In Africa, Zimbabwe’s 162,000 metric tonnes (2022) surpasses Malawi (105,000) and Mozambique (93,000).
Zimbabwe’s focus on high-quality Virginia tobacco and exports distinguishes it, though Malawi’s burley tobacco holds a niche. The 2025 high reinforces Zimbabwe’s African dominance and growing global influence, particularly in China’s market.
China, purchasing 54% of Zimbabwe’s tobacco exports in 2015, remains the largest buyer, valuing its Virginia tobacco for cigarette manufacturing. Other buyers include the European Union, South Africa, the United Arab Emirates, Indonesia, and Hong Kong. Reliance on China poses risks, as demand or price shifts could destabilise the sector. Diversifying markets, particularly to the EU and Asia, would enhance resilience.
Contract farming, involving 86% of 2018’s production, has driven the 2025 milestone by providing inputs and markets, boosting productivity by 39%. However, it often disadvantages small-scale farmers. High input costs, low output prices, and labour intensity lead to indebtedness, with some farmers trapped in unfavourable Chinese contracts. Reports highlight exploitation, with farmers struggling to cover costs or being dropped by firms, threatening livelihoods.
To maximise benefits for small-scale farmers and sustain the 2025 milestone, Zimbabwe must address contract farming inequities through strengthening farmer cooperatives. Cooperatives can negotiate better contract terms, reducing power imbalances with firms like Tian Ze. Government support for cooperative formation and training is critical.
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