Farmers can look forward to firmer tobacco prices over the next year, said Francois van der Merwe, CEO of the Tobacco Institute of South Africa (Tisa), which facilitates cooperation between producers, buyers and processors.
Over the past year Tisa has been working towards a better price structure for local producers. Van der Merwe explained these negotiations were necessitated by producers’ escalating input costs. Their problematic exchange rate has driven many Brazilian tobacco producers out of the market, putting global production under pressure.
“Now is a good time to be in the tobacco industry in SA,” said Van der Merwe, explaining that SA doesn’t produce nearly enough tobacco for the local market, forcing buyers to import thousands of kilograms. They would much rather buy from local producers, he said. Products such as oriental, burley and air-dried tobacco are in demand worldwide.
Fifteen years ago SA produced on average 30 million kilograms of tobacco per year. Anti-tobacco legislation and poor industry management have reduced this to around 10 million kilograms. Van der Merwe said many farmers who resorted to other commodities over the past decade still have the infrastructure and equipment to produce tobacco, and should consider getting back into the industry. – Jasper Raats
