Cablegate: Tobacco Harvest May Beat Early Forecasts

This record is a partial extract of the original cable. The full text of the original cable is not available.

061429Z Feb 03




E. O. 12958: N/A
SUBJECT: Tobacco harvest may beat early forecasts

1. Summary: It remains difficult to forecast Zimbabwe's
all-important tobacco earnings this year. Experts agree
the harvest will be marginally better than initially
expected, but a steep drop from last year. End Summary.

2. The stakes are high since tobacco will remain
Zimbabwe's leading export and earner of foreign exchange.
Also, the GOZ desperately wants newly-resettled
commercial farmers (known as A2s) to produce sizable
crops and lend legitimacy to its controversial land
reform. Last year's harvest yielded 166 million kgs,
down from the record year 2000 crop of 237 million kgs.
Experts still disagree how far tobacco output will slide.

High-End Scenarios
3. GOZ hawks still occasionally boast about a 150-200
million kg harvest, but objective and independent sources
dismiss these numbers. The Tobacco Industry Marketing
Board (TIMB), a somewhat independent governmental body
with a commendable forecast record, told us it is now
expecting a 85-110 million kg harvest this year, a drop
of between 33 and 48 percent. TIMB Executive Director
Stanley Mutepfa said his agency has been unable to nail
down a more precise figure for 2003 due to the chaotic
state of Zimbabwe's agricultural sector. Usually the
TIMB offers a crop estimate by February 1 for the year
that is within 5 percent of the final result. Although
Zimbabwe has been hard hit by drought, Mutepfa said
recent weather conditions have been good for many
communal tobacco growers in the 7 of 15 districts he has
surveyed, causing the TIMB to increase its estimate.
Most communal farmers did not plant until December, when
they enjoyed 4 weeks of dry weather followed by rains,
the ideal scenario for non-irrigated tobacco.

Low-End Scenarios
4. Zimbabwe Tobacco Association (ZTA) Chief Executive
Chris Molam told us his organization has upped the
estimate he offered to the Parliamentary Committee on
Agriculture on Oct 8 from 70-to-80 million kgs. But he
said he is confident the harvest will not beat 80 million
kgs, since he is already factoring in a respectable
increase for communal as well as A2 farmers from 12-to-25
million kgs. (He expects 55 million kgs from large
commercial farmers). FEWSNET Representative Elliot
Vhurumuku, an expert in crop forecasts, estimates the
tobacco crop slightly higher, at 80-85 million kgs.

5. Given initial predictions of Zimbabwean harvests as
low as 60 million kgs, the slightly higher estimates pass
for good news. Nonetheless, the economic cost of land
reform is still enormous. Without it, 2003 would have
been a banner year for tobacco growers here. The country
is unlikely to return to lofty 2000 heights unless it
sorts out an inept land redistribution that exudes

6. Several other variables could affect the country's
tobacco windfall this year. Difficult climate conditions
in Brazil have diminished its expected harvest from 600
to 515 million kgs, reducing the year's supply and
potentially increasing the world tobacco price. On the
other hand, Zimbabwe's erratic coal supplies from Wankie
Colliery could hinder the curing of tobacco before it
reaches the auction floor -- or create a new market for
wood as a less-efficient coal substitute. More
importantly, the GOZ still has not disclosed how much
export revenue it will allow growers to retain (probably
through a special exchange rate). If the rate is too
low, we're guessing farmers will smuggle tobacco out of
the country or store it for a future year.


© Scoop Media

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