Zimbabwe: Farmers Deliver Tobacco Worth $107,4 Million

Source from:  The Herald (Harare) September 8, 2006 09/11/2006

THERE has been a significant improvement in the quality of flue-cured tobacco delivered to the auction floors this year, where a total of 53,4 million kilogrammes worth US$107,4 million went under the hammer compared to last year's 57,8 million kg worth US$92,4 million. The average selling price for the golden leaf this year has been 201,4 US cents in comparison to 159,9 US cents last year. A report by the National Economic Development Priority Programme sub-committee on Tobacco Production Funding and Monitoring yesterday said deliveries were getting lighter and lighter as sales come to an end today. Mop-up sales would be held from September 26. A total of 242,9 tonnes of burley tobacco valued at US$178 100 has also been sold this year. The average price has been 0,73 US cents per kg. Seed sales for flue-cured tobacco this year stood at 297 574 grammes compared to 250 293g last year. However, seed sales for burley tobacco dropped significantly from 3 705g last year to only 220g this year as farmers shifted to flue-cured tobacco. The report said assuming a seedling rate of 5-6g per hectare, the seed purchases were sufficient to cover 49 600-59 500ha of flue-cured tobacco. A total of 55 000ha is expected to be put under tobacco in the 2006/2007 season compared to 40 000ha for the 2005/2006 season. Agribank and the Tobacco Industry and Marketing Board are expected to support a total of 15 000ha compared to 12 504ha last year. Contractors were estimated to support 20 900ha in comparison to 14 496ha last season while financial institutions would finance 13 800ha compared to 13 000ha last season. Power utility Zesa Holdings -- which has ventured into tobacco farming as a way of raising foreign currency -- is projected to contribute 5 300ha. The committee said most contractors had arranged off-shore facilities to fund contract growers and the facilities were being used to import fertilizers, chemicals, diesel and some capital items. It said seed purchases by growers showed that the target of 55 000ha for the coming season was achievable. On the fertilizer and agro-chemical supply situation, the committee said sales of tobacco compounds stood at 8 856 tonnes while tobacco compounds in stock stood at 1 100 tonnes, giving a total of 9 956 tonnes. About US$2 million was required for the compounds while US$5 million was needed for ammonium nitrate and agro-chemicals to meet the target hectarage. "Financial institutions must be compelled to funding on the basis of the viability of the cropping programme as opposed to insistence on provision of collateral. "The RBZ (Reserve Bank of Zimbabwe) has undertaken to expedite loan processing and prompt releasing of funds provided all documents and requirements are in place from submitting financial institutions," said the committee. It said growers who had put in a tobacco crop for the 2006/2007 season would need to be assured of security of tenure until the harvesting and sale of the crop. The committee also said if coal supplies to growers did not improve, then all efforts made so far would come to zero. "Railage is currently half the cost of road, therefore performance of the rail system is critical to viable tobacco production," said the committee. Rounds or cobbles of coal from Hwange were selling at $25 185 per tonne, washed nuts at $27 000 per tonne and washed peas at $31 050 per tonne while coal from Sengwa was selling at $22 425, $25 645 and $30 360 per tonne, respectively. A site visit by representatives of the industry would be conducted at Tuli Coal in Beitbridge after which possible funding modalities would be worked out. Enditem