Zim's Tobacco Deliveries Expected to Top 45 000 Tons

Source from:  June 19, 2006, By ANDnetwork .com  06/20/2006

Tobacco deliveries are expected to top 45 000 tons by the end of next month in the wake of the July 31 early delivery bonus deadline, industry experts have said. This will translate to above 85 percent of the "golden leaf" expected this year. About 52 million kg are expected to go under the hammer, down from 74 million kg produced last year. Although deliveries have been on an upward trend since the beginning of the selling season, sales could take a dip in the next few weeks as farmers were likely to hold on to their crop in anticipation of an upward review of the exchange rate when the Reserve Bank Governor Dr Gideon Gono announces his monetary policy review statement next month. "At the moment, we have a situation were farmers are selling their produce so that they can repay their loans but deliveries are encouraging. "But in light with the policy review, farmers are hoping that something positive might come out of it on the exchange rate front and there is possibility that they could hold on to their produce," the Tobacco Sales Floor (TSF) operations executive Lodwin Gatsi said. "We believe more tobacco will be delivered before July 30 because every farmer wants to benefit from 35% bonus. Nobody would want to loose it," Burley Marketers Zimbabwe (BMZ) executive director Bruce Searles said. Growers who sell their tobacco before July 31 this year will be paid 35% bonus of the total value of their crop. But those who sell their tobacco between July 1 and September 30 will now be entitled to a 20% bonus. And after September 3o, no bonus would be awarded. About $1.1 trillion had been paid to farmers under the early delivery bonus scheme. By end of business last Wednesday, about 17.4 million kg worth $32 million ($3.2 trillion) had already been sold. Figures released by the Tobacco Industry and Marketing Board (TIMB) indicated that 8.6 million kg had been sold under the contract system while 4.1, 2.7 and 2 million kg had been sold to the TSF, BMZ and Zimbabwe Tobacco Auction Centre (Zitac) respectively. The golden leaf was selling at an average price of $1.86 up from $1.18 from the previous period reflecting 54.7% increase,On seasonal basis, TSF has been offering the highest price of $3.33 while BMZ and Zitac are tying on $2.99. According to TIMB, the number of rejected bales have declined to 7%, a confirmation that quality has improved. "It is really a good season," said an official with the TIMB, adding that "we hope farmers have started preparations for the next season". Enditem