Tobacco Prices Jump 62% in Zimbabwe

Source from:  Brian Latham Bloomberg 07/07/2006

TOBACCO prices in Zimbabwe, the world's fifth-biggest producer of the top grade of the crop, jumped 62% at auction on good leaf quality, the Zimbabwe Tobacco Association said yesterday. Prices rose to an average of $2,07/kg in the 45 days to June 28, from $1,28 in the same period last year, the Harare-based body said. The price, which rose 6,7% from the previous five days of sales, reached a high of $2,14 on June 28 at Tobacco Sales Floors, the world's biggest tobacco auction floor. The rise was the first in three weeks of sales. "Leaf quality continues to range from good to excellent and buyers are responding to that quality," Tafumiswa Sigauke, an analyst at the association, said from Harare. The association represents most of the country's tobacco growers. Production of Zimbabwean tobacco, which competes with the US for quality, has slumped since 2000 - the year President Robert Mugabe began seizing white-owned farms for distribution to blacks who had been deprived of land during colonial rule. Zimbabwe has earned $50m from flue-cured tobacco sales this year, the state-controlled Herald reported yesterday. The country has sold 12196920kg of tobacco since sales began May 3, 18% less than in the same period last year. Tobacco wastage, the amount of the crop rejected by merchants or withdrawn by growers dissatisfied with prices, was 13%, the same level as in the previous five days of sales. Wastage accounted for 14% of the crop this time last year. Zimbabwe would probably produce 50-million to 60-million kilograms of tobacco this year, compared with 74-million kilograms last year, the association said. It blames the fall in production on shortages of finance and inputs such as fertilisers available to small-scale farmers resettled on former white-owned land. Enditem