Tobacco Farming Series 2: Understanding the global market

Tuesday, September 29, 2015

Tobacco remains the most important cash crop in Zimbabwe. Each year thousands of emerging farmers grow, dry, heat-cure and sell tobacco leaves under contract or on the tobacco floors  to buyers in Harare. 

Tobacco floors
Tobacco is the most regulated, and better-organized crops in the country.There are many lessons that other crop producers including the horticulture industry can learn from the tobacco industry. These include a coordinated marketing body, a contracting system and the collection of a levy for reforestation.

While tobacco remains important to Zimbabwe, global sales have been on a steep decline because of growing health concerns and anti-smoking policies in the US and Europe.

Last growing season emerging farmers experienced an overall decrease in tobacco production and leaf quality.This was caused largely by erratic rains and poor production techniques.

Farmers complained about low prices on the tobacco floors from traders in the 2015 selling season. According to Star Tobacco International, emerging farmers received on average $2.95 per kg, which was between 10-15% less than the previous selling season.  As a result, most farmers were unable to repay their high production costs (for labor, transport, seeds, chemicals and fertilizers)

Despite the downward trend, most emerging farmers still consider tobacco a high earning crop (particularly for the premium leaves) compared to other alternative crops. This is certainly worth diving into given the high production costs.

So where does the tobacco go?

The United States is currently the number one global importer of tobacco primarily from Brazil. It also produces its own tobacco for local manufacturing and export.

In the past, Zimbabwe exported most of its flue-cured tobacco leaves to cigarette manufacturers in the US and Europe. Currently, 40% of tobacco exports go to China. China has a growing population of smokers, where 60% of men are smokers. China currently offsets declining exports to the US and the EU. Other export markets include Belgium, South Africa, UAE, Russia and Indonesia.

Let us know your thoughts. Are you planning on growing tobacco this season? Have you signed up for training? Remember to plant trees or better yet use charcoal. 

Images via: New Zimbabwe / Fortune 

Disclaimer: while Emerging Farmer does everything to ensure the accuracy of our guides, it is important to contact an agronomist or your Agritex officer for accurate recommendations for your farm. Emerging farmer takes no responsibility for any losses or damage incurred due to information in this guide.


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