THE ZiG liquidity crunch is making it hard for tobacco farmers to receive the local currency portion for their produce timeously, with reduced tobacco deliveries now being recorded at auction floors.
Last month, the Reserve Bank of Zimbabwe (RBZ) reduced the foreign currency retention threshold for exporters to 70% from 75%.
Tobacco farmers were among the groups that decried the measure as it would mean less foreign currency for them to buy inputs for their crop.
Further, with the ZiG liquidity crunch, getting the local currency portion for their tobacco crop has made it even harder for farmers to buy inputs.
The Tobacco Industry and Marketing Board (TIMB) is already seeing a drop in tobacco deliveries barely a week into the 2025 tobacco marketing season which opened on March 5.
“As of Day 5 of the 2025 tobacco marketing season, a total of 5 858 317 million kilogrammes have been sold at a cost of US$20 325 449, compared to 8 912 456 million kilogrammes sold at a cost of US$28 721 134 during the same period last year,” TIMB public affairs specialist Chelesani Tsarwe told NewsDay Business.
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“The slight difference can be attributed to the fact the floors opened a week earlier as compared to last year. The average price as of Day 5 is at US$3,51/kg, up from US$3,20/kg recorded at the same time last year.”
TIMB has since reassured farmers that they would receive their payments within 48 hours of sale, urging them to report any delays.
“We are not very comfortable with this 30%-70%; 30% ZiG and 70% US dollars, as you know,” Zimbabwe Commercial Farmers Union president Shadreck Makombe said in an interview with NewsDay Business.
“We established our whole crop with the US dollar and the ZiG was nowhere to be found and even as we speak, it’s not there.
“We are also just hoping that they (RBZ) are going to make sure that there is enough ZiG for the farmers because farmers normally, after selling, would want to use the money to buy inputs and move on.”
Tobacco is the country’s top exported agricultural produce bringing in between US$1 billion and US$1,5 billion annually.
“We are also very fair and firmer as the merchants. We are trying to get as much tobacco in as possible so that they [TIMB] can get the maximum tobacco that is on the market,” Makombe said.
“So, for farmers, the start-off was good, the prices were very fair, with the lower leaf getting about US$1,80 (per kilogramme) and your top going to US$5. With most of the leaf, the greens, the sponges, they were all pushing for between US$2 to US$3.”
He said that the organisation would encourage the farmers in the next three weeks to bring all the bottom stuff.