Zimbabwe: Over 1,4 Million Kg Tobacco Sold

Source from:  The Herald (Harare) 9 May 2007 05/15/2007

MORE than 1,4 million kilogrammes of flue-cured tobacco has been sold in the first seven days of the 2007 tobacco selling season as the country's auction floors continue to register a significant improvement in deliveries. According to figures released by the Tobacco Industry and Marketing Board, 1 433 457 kilogrammes of the "golden leaf" had gone under the hammer and through the contract system by the end of business on Friday. The season opened on April 24 after a month-long standoff precipitated by complaints by farmers over low prices and a static exchange rate. Statistics available show that the amount of tobacco going through the auction floors had significantly gone up from a opening low of 86 943 kilogrammes a day to 337 369 kilogrammes on day seven. On Thursday -- day six of marketing season -- 252 842 kilogrammes of the "golden leaf" were sold while by end of business on Friday 252 297 kilogrammes had gone under the hammer at a average price of US$1,88 per kg. A visit to the country's three tobacco auction floors revealed that deliveries were rising steadily as farmers responded positively to the latest round of incentives unveiled by both Government and the Reserve Bank of Zimbabwe. The increased deliveries come hard on the heels of a new bonus scheme announced by the central bank under which farmers are entitled to a $40 000 support price for every kilogramme valued at above US$1,75. Low quality tobacco that fetches less than US$1,75 per kg will get the top-up benefit on a pro-rata basis, based on the $40 000 support price and the actual US$ price fetched. About 80 million kilogrammes of tobacco are expected to go under the hammer this year, up from 54 million kg sold last year. Figures as of last Wednesday show that the floors had received a total of 698 261 kilogrammes valued at US$841 117. In terms of prices offered, the Tobacco Sales Floors led the pack with an average price of US$1,74, followed by ZITAC with US$1,69 compared to Burley Marketers Zimbabwe with an average of US$1,64 per kg. TIMB acting chief executive officer Dr Andrew Matibiri expressed satisfaction at both the quantity and quality of tobacco being delivered to the three auction floors. "There has been a significant improvement in the volumes handled by the three auction floors. Compared to last year when a total of 226 560kg were delivered in the first five days, this year a total of about 136 000 kilogrammes had gone under the hammer on the fifth day of selling season. "This is, by far, a big improvement with both quality and presentation excellent," he noted. In addition, the prices on offer had generally been higher compared to last year. The average price this year was US$1,71 per kg compared to US$1,69 per kg a year ago. "More than 57 percent of the crop this year has been sold on contract at an average of US$1,66 per kg," he said. "We expect deliveries to improve as the season gets older. The figures are likely to grow by between four and five times above those we are experiencing now," Dr Matibiri said. Although most farmers were happy with both the auction and support prices they expressed dismay at the escalating transportation costs which have gone up since last month. Said a smallholder farmer from Rusape: "We have been forced to fork out more money each time we take our tobacco to the auction floors. I have been here twice. The first time I paid $150 000 to transport one bale to Harare but yesterday I was forced to pay $200 000 for the same trip. "We are appealing to Government to come up with mechanisms that will also avail to us cheap fuel for the transportation of agricultural commodities like tobacco and maize." Enditem