Tobacco industry players are urging a collaborative stakeholder focus on farmer efficiency to combat a potential price slump next year, driven by this year’s record output and supply glut.
Zimbabwe achieved an unprecedented harvest of 354 million kilogrammes this year, exceeding the national target by 54 million kg.
While a short-term win, the massive output has created a market glut, evidenced by some merchants still holding on to significant volumes of the crop due to a lack of immediate buyer appetite.
The situation may further be dampened by the ambitious target of 400 million kilogrammes for this year, which, if met, will only deepen the market oversupply and drive down prices.
According to some industry players, the “ultimate losers” in this production boom would be small-scale farmers who have driven the record output but possess limited financial cushions.
“Current overstocking is severely affecting prices, and the 400 million kg target will make things worse,” tobacco expert Mr Tapiwa Masedza said.
“To prevent the farmer from being the ultimate loser, we need dual action…improving farm-level efficiency and strategically managing the national tobacco volume.”
Zimbabwean tobacco holds a premium position in the global market, particularly its flue-cured Virginia leaf, known for its excellent aroma, flavour and texture.
The top-notch quality makes it highly sought after for blending with tobaccos from other regions to enhance the overall quality and taste profile of final cigarette products globally.
However, the high demand is typically subject to specific procurement limits; international buyers and contracting companies operate with predetermined purchase agreements.
This means that while the quality is outstanding, buyers will generally only acquire tobacco up to their specific operational needs, which contributes to the current market saturation when local output significantly exceeds those contracted or required buying levels. – Herald
