Zimbabwe: Firming Tobacco Prices Boost Farmer Confidence

Source from:  Financial Gazette (Harare) 11 July 2007 07/13/2007

FIRMING prices on Zimbabwe's tobacco markets have boosted farmer confidence, with the country's auction floors reporting increases in deliveries in the past weeks. Tobacco Industry and Marketing Board (TIMB) chief executive officer Andrew Matibiri said prices for the golden leaf firmed last Friday to an average of US$2.45 per kilogramme. This is a phenomenal rise as the season's average selling price is at US$2.30 per kilogramme. This year's average selling price has increased by 20 percent from last year's US$1.92 per kilogramme. Matibiri said quantity delivered has also increased by 60 percent to 39 million kilogrammes against 24 million kilogrammes for the same period last year. "The increase in inflows shows grower enthusiasm as they have delivered nearly half of the expected output," the TIMB chief said. Deliveries are expected at 80 million kilogrammes when the season closes in September. The latest tobacco harvest is a slight departure from a previous pattern of steady decline in crop output that began seven years ago. The predicted 80 million kilogrammes will represent a slight rise from the 55 million kilogrammes sold last season. The golden leaf, which enjoyed a peak of over 200 million kg in 2000, has slid year on year over the last six years to 160 million kg in 2001/2, 85 million kg in 2002/03 to 68 million kg in 2004. A shortage of inputs, undercapitalisation and the government's chaotic land reform programme has been blamed for the output decline of a crop that was once the country's key foreign currency earner. The government has so far injected $2.4 trillion through a support price arrangement for tobacco farmers at an average of $62,126.26 per kilogramme. The amount is expected to increase as deliveries continue. Matibiri expressed optimism on preparations for next year's tobacco season as he indicated that 208 kilogrammes of seed have been sold compared to 121 kilogrammes in the same period last year. "This is a 72 percent increase and shows enthusiasm among the growers," he said. Zimbabwe's dwindling tobacco crop leaves the country with less hard currency to buy vital imported commodities such as fuel and medicine. Most of Zimbabwe's tobacco is exported to Asia and the European Union. Enditem