SOME surrogate merchant buyers are allegedly swindling tobacco growers of their crop and smuggling it to South Africa, thereby squashing the country’s value addition efforts, The Manica Post Business has established.
Once smuggled to South Africa, the cartels remove the stems and process it into cigarettes, thereby earning themselves millions of dollars.
Last week on Friday, about 279 boxes of both raw and cut rag tobacco, suspected to have been smuggled from Zimbabwe, were discovered in a Eastern Cape warehouse.
The contraband is suspected to have been smuggled through the Beitbridge Border Post.
Recently, the Parliamentary Portfolio Committee on Lands, Agriculture, Fisheries, Water and Rural Resettlement – chaired by Justice Mayor Wadyajena – implored the Tobacco Industry and Marketing Board (TIMB) to put in place mechanisms to deal with the cartels.
“There are companies which are smuggling unprocessed tobacco to South Africa, are you aware of that?” asked Honourable Wadyajena when TIMB appeared before the portfolio committee.
In response, TIMB chief executive officer, Mr Meanwell Gudu, refuted the smuggling allegations.
“No smuggling will take place as I am the one who signs export permits. It is a deliberate policy that no unprocessed tobacco should be exported before being shredded and removing the stem,” he said.
But Tobacco Farmers Union Trust president, Mr Victor Mariranyika, said the contraband which was recovered in South Africa was stolen from farmers, adding that the interception was just a tip of the iceberg.
“We are pleased that the South African authorities are taking action in busting tobacco cartels. That tobacco was stolen from our farmers and these surrogate merchants are destroying the economy. The US$700 000 contraband is just a tip of the iceberg,” he said.
Meanwhile, tobacco sales has so far injected US$550 million into the economy since the inception of the marketing season.
Statistics from TIMB reveal that a total of 198 million kilogrammes of flue cured tobacco, valued at US$546 165 556, had been sold on Day 77; compared to the 174 million kgs worth US$432 139 253 sold during the same period last year.
Of this lot, 184 374 669kg, worth US$511 333 787, were sold under the contract system, while 12 367 504kg valued at US$34 831 769 were sold through the auction system.
When compared to last year, the total mass of tobacco sold this year has increased by 13.39 percent, while the prices firmed by 26.39 percent.
The average price is US$2.78, up from US$2.44 last year.
The highest price for the contract system is US$6.70 and US$4.99 for the auction system.
The highest price last year was US$6.60.
At least 200 million kg of tobacco will be sold this season, compared to the 180 million kg sold last year.
The crop hectarage went up by 6.84 percent from the 117 000 hectares planted during the 2019/20 season to 125 000 hectares this year, anchored on better quality.
About 96 percent of the leaf was grown under contract farming.