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April 26, 2011

Zimbabwe tobacco attracts Chinese investors

by Walter Muchinguri And Tawanda Musarurwa

Exports of processed flue-cured tobacco have so far raked in US$219,7 million since the beginning of the year as China remained the biggest buyer.

The money was raised from the sale of 18,8 million kg sold at an average price of US$5,24.

Normally, tobacco bought in any particular year is sent for processing, which, in some cases, includes the stripping off of the stem from the leaf or any other condition that may be prescribed by the buyers. The processed tobacco would then be exported the following year at almost double the price at the floors.

According to figures released by the Tobacco Industry and Marketing Board, China bought 18,8 million kg worth US$140,72 million at an average price of US$7,48 per kg. Current prices are hovering just above US$3 per kg.

China is currently the world's top consumer of tobacco and has become a dominant player in tobacco contract farming through company Tian Ze.

Last year Tian Ze's mother company bought more than 34 million kg of processed tobacco from Zimbabwe.

Tian Ze started with a single grower in 2005, growing 20ha of tobacco and to date the firm has contracted 159 farmers who have grown tobacco on 5 000ha.

The company, which opened its own floors in February, is planning to export more than 10 million kg of processed tobacco to China.

China was also the main purchaser of local tobacco, which last year earned the country over US$300 million.

Official statistics show that last year, Zimbabwe's trade with China was worth US$520 million.

Other tobacco exports went to South Africa, a distant second after taking up 3,5 million kg worth US$10,6 million at US$3,05 per kg, followed by the Belgium, which bought 3,4 million kg for US$14,05 million at an average price of US$4,05 per kg.

Other significant buyers were the United Kingdom, Indonesia, Germany and Belgium.

The statistics show that during the first week of April , 834 280kg was exported to seven countries at an average price of US$3,36 per kg.

The week saw the seasonal mass rising to a total of 38,5 million kg with an average price of US$2,95 per kg.

During the same week a total of 278 651 kg was imported largely from Malawi, followed by South Africa.

Meanwhile, there has been an 11 percent increase in registered growers this season from last year.A total of 57 827 growers have so far registered this year, up from about 32 000 growers registered at the start of the selling season in February. Small-scale farmers account for 81 percent of registered growers at about 46 700. This is also an improvement from the 52 000 growers registered last year.

At least 170 million kg of tobacco are expected to be sold this year.

The Herald

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