MORE Zimbabwean farmers have taken up tobacco growing in the current season, as the golden leaf promises to fetch high prices on the international markets.
Leading US-based farming publication, the Tobacco Farmer Newsletter (TFN), recently noted a likely improvement in tobacco prices in 2013 as a result of various market factors, including a deficit caused by poor to mediocre quality of flue-cured tobacco in Brazil and the US in the previous two successive seasons.
"Also, it may be that Brazil has hit a ceiling on the amount of flavour-style flue-cured it can produce. If so, then increased demand for flavour-style flue-cured will have to be met with increased production in the US and Zimbabwe," said TFN, adding tobacco buyers also indicated optimism for the flue-cured market beyond the 2012 crop and were actively seeking ways to retain current growers and increase production.
Flavour-style flue-cured tobacco is grown mainly in the US and Brazil, with Zimbabwe re-emerging after the collapse of its agriculture sector following its fast -track land reform of 2000.
The publication said consequently, global supplies of premium flue-cured tobacco were currently low even though overall supplies were up. According to TFN, there was an anticipated increase in demand for flue cured tobacco mainly because of increased cigarette production in China.
"The global trend toward banning flavourings in cigarettes may increase the amount of flavour-style flue-cured needed in blends to compensate for no flavourings."
Last week, Zimbabwe's Tobacco Industry Marketing Board (TIMB) reported that the country expected to produce 170 million kgs of tobacco in the current season after 77 910 hectares of land had been put under the crop, 38% up from 56 377 hectares last season.
TIMB CEO Andrew Matibiri said more than 65 000 farmers had registered to grow and sell the lucrative crop this season compared to 34 673 last season. Last year, Zimbabwe's tobacco exports raked in US$771 million at an average of US$5,94 per kg. The crop is expected to drive economic growth.
The World Bank recently said Zimbabwe's economic crisis led to the collapse of the agriculture sector which used to contribute 20,7 % of its GDP in the 1990s.
While the sector is slowly recovering, there is much variation in the recovery among commodities and farm types, the World Bank said.
"The 2009-2011 growth was led by tobacco, produced increasingly by smallholders in new contract farming arrangements, and supported by high international prices, with a strong performance of the cotton sector, where higher prices have favourably acted on expanded contract farming arrangements," said the institution in its overview note on Zimbabwe's Growth Recovery.
Maize and poultry have also come close to recovery of pre-crisis production levels while all other commodities remain far from recovery, with crops such as wheat remaining a small fraction of peak 1990 levels due to poor access to credit and erratic power supply.