Chinese tobacco merchants credited for price improvement in Zimbabwe

Chinese merchants have been commended for helping to significantly raise the price of tobacco in Zimbabwe.

Chairman of the Tobacco Industry and Marketing Board (TIMB) Njodzi Machirori said on Tuesday the price of the golden leaf, the country's major foreign currency earner, had risen considerably since the entry of Chinese merchants into the sector a few years ago.

"Over the past years 2.99 U. S. dollars per kg was the ceiling price of our tobacco. A cartel of merchants used to fix the price but the Chinese have broken this. They are not members of this cartel," Machirori said.

He told a committee of parliament that the opening price of tobacco had risen from an average of 3 dollars per kg last year to about 4.29 dollars this year.

The country's 2011 tobacco selling season opened last week, almost the same time last year.

This was 10 weeks earlier than the traditional time, with Machirori saying opening time had been changed to synchronize it with Brazil's tobacco marketing season.

Brazil is the world's biggest tobacco producer and used to be one of Zimbabwe's major competitors before its output dropped sharply over the past decade.

Machirori said China had huge capacity to buy Zimbabwean tobacco, and was currently consuming 40 percent of Zimbabwe's tobacco. Europe was similarly importing 40 percent of Zimbabwean tobacco while 20 percent was taken up by Africa and other buying countries around the world.

However, Machirori said his organization was concerned about reports that some tobacco contractors were ripping off growers by overpricing inputs.

"We have engaged some of the contractors but they keep telling us that there is nothing they can do. We are in a quandary because contractors are taking advantage of our incapability to finance small scale growers," he said.

Small scale farmers are the most contracted as commercial farmers afford to borrow from banks.

Meanwhile, Machirori said Zimbabwe had so far exported tobacco worth 178 million U.S. dollars at an average price of 5 dollars per kg.

The country grossed 355.4 million dollars from the sale of 123 million kg of the crop last year.

Production of the crop is rebounding after having sharply dropped during implementation of the land reform program over the past decade.