Tobacco exports up on China demand, drought dims outlook

Zimbabwe's tobacco export earnings rose 11 percent to $855 million in 2015 on higher prices and demand from China, an industry official said on Wednesday, but production this year could suffer from a scorching drought.

Tobacco is the Southern African nation's single largest export commodity, ahead of platinum and gold.

Andrew Matibiri, general manager at Tobacco Industry and Marketing Board (TIMB), said Zimbabwe - which exports 90 percent of its tobacco - sold 152 million kg of tobacco, up from 136 million kg in 2014.

Cigarette makers in China, the world's biggest market and grower of tobacco, bought 62 million kg worth $513 million or 60 percent of total earnings and nearly double its 2014 purchases.

Other major buyers of Zimbabwe's flue-cured tobacco, which is used as a flavouring in cigarettes, are Belgium, South Africa and Indonesia.

Chinese buyers paid an average of $8.31 per kg of tobacco, more than double what the other major buyers offered.

China has become the largest investor in Zimbabwe, which has been shunned by the West over its human rights record and is struggling to emerge from a deep 1999-2008 recession that forced the government to ditch its own currency in 2009.

Matibiri told Reuters that the El Nino-induced drought had delayed tobacco planting. TIMB is carrying out an assessment of the current crop, which will be harvested from March, he said.

"The El Nino effect came with prolonged dry and very hot weather during the transplanting phase of the crop," Matibiri said, referring to moving seedlings from the seedbed to the field. "This obviously decimated those crops that could not be irrigated."

Zimbabwe's tobacco production fell 8.5 percent to 189 million kg last year and some farmers project lower output this year after drought scorched their crops.

About 14 million people face hunger in Southern Africa because of the El Nino-induced drought, according to the United Nations World Food Programme (WFP), with more than 10 percent of Zimbabwe's population in need of food aid.