Business Reporter

ZIMBABWE has projected an increase in tobacco deliveries following an increase of the export incentive to tobacco growers for the 2018 tobacco marketing season, it has emerged.
Last season, more than 182 million tonnes of the golden leaf was sold, bringing in US$550 million.
In the 2018 season, earnings from tobacco exports are projected to reach over a billion dollars.
In a joint statement this week, the Reserve Bank of Zimbabwe (RBZ) and the Tobacco Industry and Marketing Board (TIMB) revealed that export incentive pay outs had been increased to 12,5 percent up from five percent, in a bid to increase production in the upcoming 2018 farming season.
Tobacco is the country’s third largest earner of foreign currency after gold and platinum.
“The RBZ recognises the growing significance of tobacco as a key foreign currency earner for the country,” reads the joint statement in part.
“Given this significance and the need to ensure sustained growth of the sector to enhance its contribution to foreign currency earnings, the bank has reviewed the export support given to the sector.
“This review is consistent with reviews of support prices on other agricultural products to enhance production.”
Tobacco growers were encouraged to desist from selling their tobacco to middlemen, as doing so would result in them losing out on the 12,5 percent export incentive.
“In line with practice, the revised 12,5 percent export incentive shall be paid directly into the respective tobacco growers’ bank accounts on a monthly basis upon submission of tobacco sales information to the RBZ by the TIMB.
“Tobacco growers are, therefore, implored to have active bank accounts, with banks of their own choice, prior to the start of the 2018 tobacco marketing season so as to avoid inconveniences on delayed payments at the start of the tobacco selling season.”
In order to promote the use of plastic money and at the same time decongest tobacco auction floors, tobacco growers are encouraged to use their respective bank branch networks and points of sale across the country.
“The RBZ has engaged bulks to facilitate the opening of low cost bank accounts for tobacco growers, which accounts shall remain active during and after the tobacco selling season,” reads the statement.
Economic analysts opine the move will increase the number of tobacco farmers in the country.
Economic analyst, Tilda Sibanda said it was unfortunate some farmers got a raw deal last season.
She said last season saw the middleman reaping where he did not sow.
“The initiative by the RBZ and TIMB is expected to bring sanity as farmers will not struggle, but get their hard-earned cash on time.”
Zimbabwe boasts the second-best average price of tobacco in the world after the US.
This season, the average tobacco price was US$2,88, down from US$2,91 last year.
While the highest price at the country’s contract floor was US$6,25 in 2016, it has dropped by four percent to US$6.
As has become the norm, the auction floors have maintained a US$4,99 ceiling.
The increased deliveries come despite the cash shortages, which have seen farmers waiting for weeks to get their money from banks.
Increased deliveries came despite glitches encountered in the use of the electronic trading system.
Major export destinations that have relied on Zimbabwe’s tobacco are China, Indonesia, Belgium, South Africa, Sudan and Russia
Zimbabwe has been on the top list of three types of tobacco grown in the world, namely virginia, burley and oriental tobacco.
Virginia tobacco is cured in heated barns, that is where the name ‘flue-cured’ comes from.
In most cases, the curing process takes a week.
It is the most preferred because of the less time taken to process it.
Burley tobacco, the second type grown in Zimbabwe is also grown in other countries like the US.
Burley tobacco is air-cured in barns and the curing process which takes up to two months makes the tobacco lose most of its natural sugars and develops a strong, almost cigar-like taste.
Oriental tobacco on the other hand, is highly aromatic and has small leaves which are harvested leaf by leaf, much like virginia tobacco and sun-cured in open air.