Flue-Cured Tobacco Earns Zim US$70m

Source from:  herald.co.zw Business Reporter 11/22/2007

ZIMBABWE has earned US$70 million from 35,8 million kilogrammes of flue-cured tobacco delivered to the country's three auction floors. By end of business on Wednesday, close to 17,8 million kg of the golden leaf had been sold through the auction floors while 17,9 million kg was sold through the contract system. The golden leaf was selling at an average price of US$1,90 per kg and US$2,01 for contract sales. This time last year, 39,5 million kg of tobacco worth US$58 million had already gone under the hammer, according to the Tobacco Industry and Marketing Board. This year, Zimbabwe stands to earn about US$100 million from 50 million kg of tobacco, down from last year's 74 million kg worth US$140 million. Despite a continued decline in production over the past six years, tobacco still remains one of Zimbabwe's largest foreign exchange earners. Meanwhile, the new output-based incentive for tobacco growers announced by the Reserve Bank of Zimbabwe early this week is expected to go some way in enhancing production. Presenting his Mid-Term Monetary Policy Review Statement on Monday, central bank governor Dr Gideon Gono said growers would get additional support of 65 percent of sale value of actual deliveries to the auction floors, at the old exchange rate of $101 000 to the US dollar with effect from day one of the season to August 31 2006. The 2006 tobacco selling season kicked of on April 25. The support was over and above the 35 percent early delivery bonus awarded to tobacco growers. "Consideration of various options to support the sub-sector has shown that an appropriate intervention is one which rewards and motivates those who have interest in this specialised sector to expand their productive capacities," Dr Gono said.. "We call upon the tobacco industry to take full advantage of this programme and restore the glitter of our tobacco sector." Enditem