Zimbabwe Season Spins Out of Control

Source from:  tobaccoreporter.com Zimbabwe, Wednesday, April 18, 2007 04/20/2007

The pressure is mounting on Zimbabwe's leaf tobacco industry as a dispute that has held up the opening of sales is starting to create problems that could have long-term negative effects. According to a report in The Independent, the country stands to lose millions of dollars in potential earnings from tobacco because international buyers are flocking to Malawi while the dispute over prices and the exchange rate continues in Harare. The Independent's report revealed also that some Zimbabwe farmers were smuggling their tobacco out of the country to get better prices, though there was no mention of how extensive this trade was. But perhaps the delay is unimportant anyway. The Financial Gazette said there had been reports that authorized tobacco dealers were struggling to mobilize enough foreign currency for purchases. All green leaf tobacco has to be purchased in US dollars and the Reserve Bank of Zimbabwe has issued a notice advising authorized dealers to arrange offshore lines of credit. But dealers were said to have indicated that international financiers were growing increasingly reluctant to provide such credit. And looking further ahead, the Zimbabwe Association of Tobacco Growers is concerned that the delay to the opening of tobacco auctions could hold-up farmers' preparations for the next tobacco-farming season, The Herald has reported. According to the association, land preparations for tobacco planting for next season should have started, but this requires financing. Enditem