Zimbabwe’s 2026 tobacco marketing season is recording a notable increase in volumes, although prices continue to lag behind last year’s levels, reflecting shifting market dynamics.

As of Day 34 of the selling season, a total of 149.92 million kilograms of tobacco has been sold across both auction and contract floors.

This marks a significant rise compared to the same period in 2025, when 93.99 million kilograms had been sold.

Strong Growth in Volumes

Auction floors have contributed 8.81 million kilograms, with an average price of US$2.06 per kilogram. Meanwhile, contract sales dominate the market, accounting for 141.12 million kilograms at a higher average price of US$2.69 per kilogram.

Combined, the national average price currently stands at US$2.65 per kilogram.
The figures reflect a year-on-year volume increase of over 59%, highlighting strong farmer participation and improved output this season.

Prices Under Pressure

Despite the impressive growth in volumes, prices have declined significantly. During the same period in 2025, tobacco was selling at an average of US$3.42 per kilogram, meaning prices have dropped by approximately 22.5% this year.

This downward trend suggests several possible factors at play, including:

Increased supply, which may be putting pressure on buyers and reducing competitive pricing

Variations in quality, with a larger proportion of lower-grade leaf entering the market

Weaker global demand conditions, affecting export-driven pricing structures

Outlook for the Season

While lower prices may affect farmer earnings, the higher volumes could help cushion overall revenue losses, especially for large-scale producers.

However, for smallholder farmers, profitability may remain a concern if input costs are not matched by returns.

Market watchers will be closely monitoring upcoming sales trends to determine whether prices stabilise or continue to soften as the season progresses.

Overall, Zimbabwe’s tobacco sector remains resilient in output, but the price dynamics signal the need for strategic adjustments to maintain value in the global market.

Zimbabwe’s fertiliser industry is set for strong growth under the National Development Strategy 2 (NDS2), as new investments aim to boost local production and reduce imports.

A key project is a US$200 million fertiliser plant by Xintai, operating through Palm River Resources, to be built in Beitbridge. Construction is expected to start in June 2026, with production beginning in February 2027.

The plant will produce 200,000 tonnes of urea and 200,000 tonnes of ammonium nitrate each year. It will also generate its own electricity and reuse gas emissions for power, helping to lower costs.

In addition, the government is supporting a larger US$3 billion fertiliser and chemicals project by Jinfeng. This project will include a 900MW power plant and aims to turn Zimbabwe into a regional fertiliser exporter.

These developments are expected to reduce the country’s reliance on imported fertiliser, save foreign currency, and make inputs more affordable for farmers.

They will also help turn Beitbridge into an important industrial hub, supporting Zimbabwe’s goal of growing its economy and improving food production.

The Zimbabwean Small and Medium Enterprise (SME) sector underwent a period of rigorous fiscal recalibration in the first quarter of 2026, pivoting from the liquidity-constrained and informal-leaning environment of the previous year.

While the first quarter of 2025 was marked by the initial friction of the Zimbabwe Gold (ZiG) introduction and a defensive posture by small-scale operators, the current quarter saw the sector move toward deeper integration into the formal value chain, underpinned by a projected 5.0% real GDP growth for the fiscal year.

In the first quarter of 2025, the informal sector’s dominance was reflected in a high velocity of transactions outside the traditional banking net, even as the Zimbabwe Revenue Authority (ZIMRA) achieved net collections of US$3.21 billion by the mid-year mark.

By contrast, the first quarter of 2026 reflected the tangible success of the Block Management System and the downward revision of the Intermediated Money Transfer Tax (IMTT) from 2% to 1.5%.

These policy shifts incentivized formal banking activity among SMEs, resulting in a notable uptick in ZiG-denominated transactions and a reduction in the parallel market premium, which had previously eroded the working capital of small-scale manufacturers by an estimated 15.3% in early 2025.

The performance of SMEs in the extractive and agricultural sectors provided the most striking numerical contrast. During the first quarter of 2025, the mining sector largely driven by small-scale gold and lithium miners suffered a 21.57% slump due to global price volatility and domestic energy constraints.

However, by the first quarter of 2026, the sector benefited from revised gold royalties and the commissioning of decentralized lithium processing plants, allowing SME output to stabilize in line with the government’s 6.3% mining growth target.

Similarly, the agricultural SME sub-sector, which had struggled with a drought-induced contraction in 2024, leveraged the momentum of a 6.6% rebound in late 2025 to achieve a projected 5.4% expansion this quarter, supported by improved climate-smart irrigation financing.

Financial inclusion and capital access for enterprises also witnessed structural evolution. In the first quarter of 2025, the Zimbabwe Stock Exchange (ZSE) All Share Index had retreated by 5.67%, and credit to the private sector remained heavily skewed toward large-scale blue-chip corporations.

The opening phase of 2026, however, saw increased participation of high-growth SMEs on the Victoria Falls Stock Exchange (VFEX) and within specialized SME funding windows.

With annual inflation trending toward a single-digit forecast and the VAT rate adjusted to 15.5% as of January 1, 2026, the cost-push pressures that had crippled many boutique manufacturing units in the previous year were partially mitigated by a more predictable price discovery mechanism.

This aggregate stabilization suggests that the SME sector has successfully transitioned from a survivalist mode into a strategic component of the nation’s broader industrialization agenda.