Tobacco buyers have put demand for this season’s crop at 213 million kilogrammes (kg), a feat Tama Farmers Trust says will be difficult to achieve due to capacity challenges.
This is despite Tobacco Commission (TC) licensing about 54 370 farmers to grow 238.9 million kg of tobacco, the country’s main foreign exchange earner, which brings in about 60 percent of foreign exchange earnings.
Last season, the tobacco regulator licensed farmers to grow 265.9 million kg of the leaf, but farmers ended up producing 133 million kg, which was below the 190 million kg buyers’ demand.
Licensing closed on October 31 and TC spokesperson Telephorus Chigwenembe said in an interview yesterday that the commission will impose a penalty of 25 percent of total fees to license farmers after the deadline.
But he said demand for this season can be achieved under normal weather conditions coupled with growing interest from farmers.
Said Chigwenembe: “We also think that with the right conditions, this [the demand] is feasible. The first thing which we have no control over is the weather. If the rainfall pattern is favourable, we are assured of good production.
“So far, we have growing interest in tobacco production because of last season’s prices. If prices are as good as they were or are better, farmers will be highly motivated to produce more.”
However, the trend shows that
although TC licenses huge volumes, the output has remained below demand for the past four to five years.
In 2022/23 season, TC licensed farmers to produce 172 million kg, but farmers produced 85 million kg while the demand was at 140 million kg.
Similarly, in 2021/2022, season, the tobacco regulator licensed farmers to grow 162.8 million kg against 140 million kg demand, but the output was recorded at 123.6 million kg while in 2020/2021 season, the regulator licensed about 150 million kg out of the demanded 132 million kg, but the output was 114 million kg.
Tama Farmers Trust chief executive officer Nixon Lita said in an interview yesterday that it is doubtful that production can jump from 133 million kg last season to over 200 million kg because of ongoing capacity challenges.
He said: “The main reason is lack of capacity because farmers that did not sell in 2024 will find it hard to raise financing for fertiliser and labour.
“Those that produced and sold in 2024 have the potential to increase production as they benefited from the good prices that prevailed, especially taking into consideration the fact that the earnings were in dollars.”
In the last season, the country raked in $396.9 (about K694.9 billion) from the leaf sold at an average price of $2.98 (K5 217) per kg, a rise from the previous season’s $282.1 million (K494 billion) at average price of $2.14 (about K3 747) per kg.
In 2021/2022 season, the country earned $197 million (about K344.9 billion) at an average price of $1.59 (about K2 784) per kg while in 2020/21 season, the country realised $195 million (about K341.4 billion) at an average price of $1.60 (about K2 801) per kg.
Tobacco still remains the country’s main foreign exchange earner and contributes about 13 percent to the country’s gross domestic product
