Identifier
Created
Classification
Origin
05HARARE559
2005-04-11 13:45:00
CONFIDENTIAL
Embassy Harare
Cable title:
LOWER QUALITY ZIMBABWEAN TOBACCO HITTING MARKET
how-toThis record is a partial extract of the original cable. The full text of the original cable is not available.
C O N F I D E N T I A L HARARE 000559
SIPDIS
AF/EX
AF/S FOR BNEULING
EB/IFD FOR FCHISHOLM
NSC FOR SENIOR AFRICA DIRECTOR C. COURVILLE
TREASURY FOR OREN WYCHE-SHAW, STATE PASS USAID FOR MARJORIE
COPSON
ALL AFRICAN DIPLOMATIC POSTS
E.O. 12958: DECL: 12/31/2009
TAGS: EAGR ECON ETRD PGOV ZI EINV
SUBJECT: LOWER QUALITY ZIMBABWEAN TOBACCO HITTING MARKET
Classified By: Ambassador Christopher Dell for reasons 1.4 b/d
C O N F I D E N T I A L HARARE 000559
SIPDIS
AF/EX
AF/S FOR BNEULING
EB/IFD FOR FCHISHOLM
NSC FOR SENIOR AFRICA DIRECTOR C. COURVILLE
TREASURY FOR OREN WYCHE-SHAW, STATE PASS USAID FOR MARJORIE
COPSON
ALL AFRICAN DIPLOMATIC POSTS
E.O. 12958: DECL: 12/31/2009
TAGS: EAGR ECON ETRD PGOV ZI EINV
SUBJECT: LOWER QUALITY ZIMBABWEAN TOBACCO HITTING MARKET
Classified By: Ambassador Christopher Dell for reasons 1.4 b/d
1. (C) Summary: Mashonaland Tobacco Company Marketing
Director Graham Dupree told Econoff on April 8 his company
was paying about half as much per kilogram of tobacco this
year as last. Dupree attributed the steep fall in price to
both an increasing global supply and a poorer quality
Zimbabwean crop. End Summary.
2. (C) A division of U.S. tobacco giant Dimon, Mashonaland
Tobacco is currently Zimbabwe's largest tobacco merchant
(i.e., middleman between growers and cigarette producers).
Marketing Director Dupree said his company believed this
year's worldwide supply of tobacco was particularly large,
with Brazil producing a record 700 million kgs and still
possessing a large 2004 carryover crop. Although
higher-grade tobacco was still scarce and would fetch
US$2.60-2.80/kg this year - almost identical to last year,s
rates - Dupree told Econoff that the quality of Zimbabwe,s
crop had fallen significantly since 2004. He said most
Zimbabwean tobacco now occupied the bottom-end of the quality
spectrum and Mashonaland Tobacco had been paying less than
US$1/kg in the first week of sales.
3. (C) Comment: Fast-track land reform has decimated
Zimbabwean tobacco output, which once accounted for one-third
of its foreign exchange earnings. Last year,s crop of 65
million kgs was the lowest since 1972, down from a record 238
million kgs in 2000 and well below the GOZ's official,
optimistic targets. Even a Z$2,000/kg support bonus does
little to offset the decline or to help producers make ends
meet. Moreover, the first week of the 2005 selling season
suggests new farmers are also producing lower grade tobacco,
which will further depress this year's forex inflows.
Dell
SIPDIS
AF/EX
AF/S FOR BNEULING
EB/IFD FOR FCHISHOLM
NSC FOR SENIOR AFRICA DIRECTOR C. COURVILLE
TREASURY FOR OREN WYCHE-SHAW, STATE PASS USAID FOR MARJORIE
COPSON
ALL AFRICAN DIPLOMATIC POSTS
E.O. 12958: DECL: 12/31/2009
TAGS: EAGR ECON ETRD PGOV ZI EINV
SUBJECT: LOWER QUALITY ZIMBABWEAN TOBACCO HITTING MARKET
Classified By: Ambassador Christopher Dell for reasons 1.4 b/d
1. (C) Summary: Mashonaland Tobacco Company Marketing
Director Graham Dupree told Econoff on April 8 his company
was paying about half as much per kilogram of tobacco this
year as last. Dupree attributed the steep fall in price to
both an increasing global supply and a poorer quality
Zimbabwean crop. End Summary.
2. (C) A division of U.S. tobacco giant Dimon, Mashonaland
Tobacco is currently Zimbabwe's largest tobacco merchant
(i.e., middleman between growers and cigarette producers).
Marketing Director Dupree said his company believed this
year's worldwide supply of tobacco was particularly large,
with Brazil producing a record 700 million kgs and still
possessing a large 2004 carryover crop. Although
higher-grade tobacco was still scarce and would fetch
US$2.60-2.80/kg this year - almost identical to last year,s
rates - Dupree told Econoff that the quality of Zimbabwe,s
crop had fallen significantly since 2004. He said most
Zimbabwean tobacco now occupied the bottom-end of the quality
spectrum and Mashonaland Tobacco had been paying less than
US$1/kg in the first week of sales.
3. (C) Comment: Fast-track land reform has decimated
Zimbabwean tobacco output, which once accounted for one-third
of its foreign exchange earnings. Last year,s crop of 65
million kgs was the lowest since 1972, down from a record 238
million kgs in 2000 and well below the GOZ's official,
optimistic targets. Even a Z$2,000/kg support bonus does
little to offset the decline or to help producers make ends
meet. Moreover, the first week of the 2005 selling season
suggests new farmers are also producing lower grade tobacco,
which will further depress this year's forex inflows.
Dell