China drives Zim tobacco recovery
by Tobias Manyuchi Thursday 24 February 2011
HARARE – Cash-rich Chinese merchants will snap up nearly half of Zimbabwe’s
2011 tobacco crop helping to drive up prices, while breaking the
stranglehold of mostly European buyers accused of keeping prices down in
past years, Harare tobacco authorities said.
Tobacco Industry and Marketing Board (TIMB) chief executive officer Andrew
Matibiri told a special parliamentary committee that the entry of the
Chinese had been a boon to Zimbabwean growers with prices now averaging
US$0.58 more per kilogramme than before arrival of buyers from the Asian
giant.
“Of the tobacco sold 40 percent is going to China, the other 40 to Europe
and the remainder to other parts of the world,” Matibiri told Parliament’s
portfolio committee on agriculture, water, lands and resettlement earlier
this week.
“Before the arrival of the Chinese US$2.99 per kilogramme was the ceiling,”
he said, adding that tobacco prices have averaged US$3.57 per kg since the
tobacco auctioning season began last week.
According to Matibiri, who spoke to the parliamentary committee on
Wednesday, prices were expected to continue firming up on the back of
growing Chinese demand.
Tobacco’s earnings potential has fallen behind that of mining in recent
years chiefly because of President Robert Mugabe’s controversial land reform
programme that saw large-scale white commercial growers expelled from the
land and replaced by black villagers without experience or capacity to
maintain production.
Before land reforms, a few hundred white commercial farmers produced on
average more than 200 million kilogrammes of tobacco per year that earned
Zimbabwe around $400 million annually, making the crop the country’s single
largest foreign currency earner.
But the tobacco sector is on the road to recovery with 60 000 mostly black
farmers — or 35 000 more farmers than were recorded last year — expected
to deliver 170 million kilogrammes of tobacco by close of the selling season
at the end of September.
Zimbabwe produced 123 million kilogrammes last year that earned the country
US$384 million.
The Chinese companies have in recent years targeted cash-strapped Zimbabwean
small-scale tobacco farmers whose production they finance in return for
preferential access to the crop.
China purchases the crop through the China Tobacco Company represented in
Zimbabwe by Tian Ze.
“Farmers are responding positively and the prices have been favourable
mostly attributable to the presence of the Chinese,” Matibiri said.
Since the marketing season opened last week, tobacco worth more than US$175
million has been exported.
China has emerged as one of Zimbabwe’s most important political allies and
trading partners since 2000 when Mugabe adopted his ‘Look East’ policy.
The policy is premised on the need to find new trading partners and markets
after traditional investors from Western nations turned against Harare in
protest over Mugabe’s human rights abuses, repression against political
opponents and his violent land reform programme.
The “Look East” policy specifically targets investors from Muslim and Asian
nations and in exchange Zimbabwe has promised minerals – including diamonds
and gold – and prime land to the investors, resulting in Harare penning
several agreements mainly with China, Russia and Iran.– ZimOnline