·        China, the world’s biggest tobacco producer opens its economy

·        Tobacco prices set to increase

·        Zimbabwe intends to ramp up the beneficiation of tobacco

China is the largest consumer of tobacco in the world, with more than 300 million smokers according to World Health Organization data. With China re-opening, we expect to see an increase in the demand for Zimbabwean tobacco. However, the terms of trade that currently apply see Zimbabwe exporting tobacco in its raw form. Zimbabwe remains China’s top trading partner for the importation of unmanufactured tobacco. Trading data shows that imports from Zimbabwe in 2021 stood at 44%, with a value of 511 million US$. This value is greater than the combined share value of China’s imports with the second and third-greatest trading partners.

Zimbabwe has however developed a keenness to move up the value chain and has purposed to ensure value addition for tobacco before export. This, like lithium, is in an effort by the Government to increase the country’s share of earnings from its exports. This intention is in line with the government’s plan to reach a US$ 5 billion tobacco industry by 2025.

“Our tobacco is worth billions on the international market, but as Zimbabwe, we only get USD1 billion. So, the government has now put in place the transformation plan to ensure that we increase the volume and also value add so that by 2025 we can have a USD5 billion industry”, said the minister of lands in a press release.

As demand for tobacco products is set to increase and prices for the commodity are set to follow, given the opening up of the world’s largest consumer. The Zimbabwean government has a keen incentive to raise its capacity for beneficiation of the cash crop so as to receive more value from its trade.