ITGA Crop Monitor: August 2020_nº4
ITGA: WHAT THE MARKETING SEASON 2019/20 HAS REVEALED SO FAR
Early August has brought the news that the Zambian 2020 FCV tobacco leaf campaign has been productive and profitable. FCV tobacco growers have benefited from increased prices and production, thus revenues have improved from last year. Burley producers do not share the same fortune. In the case of this tobacco variety, both quantity and price have diminished. Regarding flue-cured Virginia (FCV), production increased by 14.4% to 23,110 tons. However, tobacco growing is under pressure since the Zambian Tobacco Control Consortium has called for the revocation of incentives to tobacco companies operating in the Lusaka South Multi-Facility Economic Zone (LSMFEZ).
The 2020 African tobacco leaf marketing season has been characterized by higher prices, although, with the lower tobacco output, overall revenues will not reach the 2019 value. Revenues from tobacco sales in the country that is most reliant on tobacco (Malawi) are 37% below last year’s value. Tobacco sales have been affected by an increase in rejection rates both in auction and contract floors, which saw the number of marketable tobacco bales decrease. Tobacco growers have strongly protested against this situation. This year, for the first time ever, tobacco grown under contract was rejected by the companies. Some tobacco growers have complained that even with extension services the process of growing a crop is not entirely supported, which during a crisis such as the Covid-19 outbreak, creates additional difficulties when trying to successfully produce a difficult crop like tobacco.