Tobacco sales exceed US$40m

23 Apr, 2021 - 00:04 0 Views
Tobacco sales exceed US$40m

The ManicaPost

Samuel Kadungure

Senior Reporter

THE 2021 tobacco marketing started on a firm ground with sales now exceeding US$40 million following the sale of 16 million kilogrammes of the golden leaf across the country within a space of two and half weeks.

Tobacco deliveries are expected to surge further as prices, currently 117 percent better than last season, continue to firm as the quality of the leaf improves.

Statistics from the Tobacco Industry Marketing Board (TIMB) show that a total of 15 903 800kgs, valued at USD39 760 539, have been sold to date, which is 97 percent better than the 8 049 808kgs sold during the same period in 2020.

A total of 14 377 532kgs, valued at US$36 111 241, were sold under contract auctioning; while 1 526 268kgs, valued at US$3 649 299, were through auction floors.

The average price at the action floors is US$2,29 the auction floors and US$2,51 for those on contract.

The highest price offered this season is US$6,30, while the minimum is US$0,10.

At least 300 million kilogrammes of the golden leaf is expected this season, which is 11 percent higher than the 270 million kgs produced in 2020.

Statistics from TIMB show an increase of buyers from 33 in 2020 to 39 this season, while more contracting companies decentralised their auction floors to five towns in the country.

The increase in buyers mean higher competition and demand for the quality leaf and prices are expected to improve.

Farmers usually test the market with primmings (lower leaves).

Zimbabwe Farmers’ Union Trust president, Mr Victor Mariranyika, said most of the golden leaf has been sold through the contract floors.

“This is welcome improvement and our hope is that the delivery will continue throughout the whole season.

“We hope the average price will improve and firm to match the production costs of a consumable kg, currently pegged around US$3,33 per kg. We do not want to see a situation where tobacco is bought at prices below production costs. Farmers must realise value for their crop,” said Mr Mariranyika.

“Price defines the well-being of the tobacco industry and if they are manipulated and skewed against farmers, we head for disaster. Zimbabwe, like many other tobacco producing countries, exports unprocessed tobacco, hence the need to look at the value to minimise profiteering.

“The influx of contractors and buyers without special mechanisms of controlling them has left growers vulnerable to unscrupulous economic saboteurs. Most of these are under funding production and reaping the farmers, especially the small-scale growers. They are left indebted to contractors,” said Mr Mariranyika.

Contractors only buy tobacco from growers they would have supplied with inputs.

Zimbabwe Commercial Farmers’ Union president, Dr ShadreckMakombe, said farmers with a good quality crop are getting viable prices while the low quality crop is fetching low prices.

“So far prices appear to be fair, especially at the contract floors. We expect the prices to continue firming as farmers bring the best of their grade. We urge farmers to work on improving the quality of the crop,” he said.

Ethical Leaf Tobacco spokesperson, Mrs Patience Mushore-Chizodza, said they have so far bought at least one million kgs.

“The marketing season has started on a high note as we are receiving good quality tobacco, attributed to the good rains that the country received. Our highest price has been US$5,30, with most growers fetching between US$5 and US$5,30,” said Mrs Mushore-Chizodza.

Tobacco growers will this year retain 60 percent of their earnings in foreign currency, while the remainder will be liquidated at the prevailing exchange rate.

Unlike last year, there is no compulsory liquidation of forex retained and farmers are free to purchase or supplement their foreign exchange requirements from the auction system.

This is, however, below the 80 percent the farmers had requested.

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