Zimbabwe's Tobacco Earnings Rise 33% as Sales Jump Outweighs Drop in Price

Zimbabwe’s income from tobacco sales has jumped 33 percent since the marketing season started last month compared with a year earlier, as a rise in sales outweighs a drop in prices, the Tobacco Industry and Marketing Board said.

The southern African nation has earned about $12 million from sales of the leaf since Feb. 16, up from $9 million a year earlier, the board said in an e-mailed statement today. About 4.1 million kilograms (9 million pounds) of tobacco has been sold at an average price of $2.09 a kilogram, compared with 2.5 million kilograms at $3.06 per kilogram last year, it said.

Tobacco production in Zimbabwe is still below peak levels of about 236 million kilograms achieved in 2000, before President Robert Mugabe’s Zimbabwe African National Union-Front party sponsored often-violent seizures of most white-owned farms. Output slipped to a low of 58.6 million kilograms in 2009, reflecting the effects of a political and economic crisis that peaked during 2008.

Zimbabwe’s tobacco output may rise 38 percent to 170 million kilograms this season as more farmers grow the crop and as the nation’s “economic environment” improves, Andrew Matibiri, the board’s chief executive officer, said on Feb. 16.

Small-scale tobacco farmers currently account for more than half of Zimbabwe’s output, Agriculture Minister Joseph Made said on the same day. As production rises, farmers should now focus on improving quality, he said.

Zimbabwe earned $347.8 million from tobacco sales last year, according to the board, which oversees the industry. China was the main buyer of Zimbabwe’s crop, replacing Western companies that were traditionally the biggest buyers, it said.

Zimbabwe is the world’s sixth-largest exporter of the flue- cured variety of the leaf, which is also known as Virginia tobacco. It lags behind Brazil, India, the U.S., Argentina and Tanzania, according to the website of Universal Corp., the world’s biggest tobacco-leaf merchant.

To contact the reporter on this story: Nelson Gore Banya in Johannesburg at ngbanya@bloomberg.net

To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net

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