Zimbabwe: Contract Sales Concept Proves Viable for Flue-Cured Tobacco

Source from:  The Herald (Harare) 18 December 2007 12/19/2007

CONTRACT sales, a concept started a few years ag, has emerged as a viable alternative to sell flue-cured tobacco, with the system accounting for 60 percent of the 73 million killogrammes sold during the just-ended extended 2007 tobacco selling season. Final sales closed last Saturday. A report released by the Tobacco Industry Marketing Board showed that contract sales accounted for 43,5 million kg. At least 29,5 million kg were sold through auction. The average price for contract sales was US$2,26 while for auction sales it was US$2,40 per kg with the overall seasonal average price being US$2,32 per kg. A total of $5,217 trillion was paid out to growers as Government support price. With regards to burley tobacco, a total of 92 879kg was sold at an average price of US$1,61 per kg and $4 billion was paid out as Government support price. All the burley was sold through contract sales. Only 84 growers produced the 2007 burley tobacco but up to 30 November 2007 a total of 2 601 had registered with TIMB to grow the variety. Their cropping intentions totalled 4 494 hectares. In the case of oriental tobacco, a total of 29 265kg were sold at an average price of US$1.80 per kg while $2 billion was paid out in Government support. TIMB said despite the extension of the selling season from September to this month, very minor contract sales were conducted after the formal end of the selling season. At the end of the selling season in September, 70,4 million kg of flue-cured tobacco had been sold, while the total of 73 million after the extended period was 4 million kg shy of the targeted 77 million. TIMB acting chief executive Dr Andrew Matibiri said they expected growers to have delivered all their tobacco by Saturday. "TIMB wishes to remind growers that it is against the law to hold tobacco beyond 15 December without authority from Tobacco Industry and Marketing Board. "If any farmer still has unsold tobacco they must notify TIMB without delay," he said. According to the report, up to November 30, 2007 a total of 24 294 tobacco growing units/people (as opposed to 15 915 at the same time last in 2006) had registered with TIMB to grow tobacco during the 2007/08 season and their total planned tobacco planting amounted to 59 949 hectares. TIMB said by the beginning of the 2008 selling season it is expected that over 28 000 would have registered. During 2007 there were over 27 000 registered growers. Meanwhile, an additional nine companies have been added to the list of tobacco contract companies for the 2007/08 flue-cured (Virginia) tobacco season. These are Mashonaland Tobacco Company, Inter-continental Leaf Tobacco Company, Shasha Tobacco, Noczim, Business Development Group, Double Bridge Industries, Tobacco Sales Administration Services, Zimbabwe Farmers' Development Company and the Zimbabwe Global Agric Development. TIMB acting chief executive Dr Matibiri said the companies had received approval from the Ministry of Agriculture and were duly registered with TIMB. For burley tobacco, one company received approved while approval of the second was reported to be imminent. Gold Driven Investments is the approved contractor while Savanna Tobacco's Memorandum of Agreement is still to be approved and signed by Ministry of Agriculture. Enditem