Zimbabwe: 2008 Tobacco Deliveries to Rise

Source from:  The Herald (Harare) 18 March 2008 03/19/2008

A total of 75 million to 80 million kilogrammes of flue-cured tobacco is expected to be delivered to the auction floors this season. The figure compares favourably with the 73 million kg of tobacco that was delivered to the floors during the entire selling season last year. According to figures released by the Tobacco Industry Marketing Board in January a total of 58 048 hectares had been planted since the beginning of the current season representing over 96 percent of the targeted hectarage planted to date. TIMB statistics show that a total of 48 123ha of tobacco was planted under dryland across the country representing 80,2 percent of the targeted hectarage. At least 9 907ha was planted under the irrigated crop across the country representing 16,5 percent of the targeted hectarage. The irrigated crop, which is already being cured was reported to be of very good quality. The Tobacco Industry Marketing Board has agreed on April 22 as the tentative date for the official opening of the 2008 tobacco-selling season while burley sales would begin on April 29. TIMB's acting chief executive Dr Andrew Matibiri said the date was still to be endorsed by Agriculture Minister, Mr Rugare Gumbo and Finance Minister, Dr Samuel Mumbengegwi. Dr Matibiri said there could be some good news in the offing for tobacco farmers in terms of tobacco prices. "Judging by indications from the region, we are expecting a price that is better than that of last year," he said. Last year the average price for contract sales was US$2,26 while for auction sales it was US$2,40 per kg and the overall seasonal average price was US$2,32 per kg. Dr Matibiri said they were now actively pursuing a number of sticky issues that have to be addressed before the start of the season to ensure a smooth flow of the season. These included the shortage of wrapping paper, which led to the temporary suspension of tobacco deliveries to the auction floors last year. Dr Matibiri said they were engaging the Reserve Bank of Zimbabwe on foreign currency provisions to be made for the sourcing of the material ahead of the start of the new season. In addition, he said they were also pursuing the issue of out-standing foreign currency payments under the Foreign Currency Retention facility. Reserve Bank of Zimbabwe governor Dr Gideon Gono had indicated in his midyear monetary policy in October last year that all outstanding payments would be paid before the end of that month. Other outstanding issues to be discussed included the exchange rate, which farmers want revised so as to cover them from loses incurred due to ever increasing costs. The cost of producing a tobacco crop had risen drastically with at least $40 billion now required to grow tobacco per hectare. During the last season farmers demanded the review of the exchange rate applying then of US$1 to $250 and the reinstatement of the foreign currency retention facility. The exchange rate was subsequently moved to US$1 to $30 000, which the farmers believe is still low. Dr Matibiri said stakeholders wanted a price that was reflective of such changes in production costs and they were also approaching Government on the issue. A total of 17 companies have been have been approved as contract growing and buying companies for the 2007/08 flue-cured (Virginia) tobacco season. These included Chidziva Tobacco Processors, Gold Driven Investments, Manellie Investments, Saltlakes, Tian Ze, ZESA Enterprises, Zimbabwe Leaf Tobacco Company and Zimbabwe Tobacco Growing Company. Mashonaland Tobacco Company, Intercontinental 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. Contract sales proved to be the best mode through which tobacco is marketed last season with the systems accounting for 60 percent of the 73 million kilogram's of flue-cured tobacco that went under the hammer during the extended 2007 tobacco selling season. Contract sales accounted for 43,5 million kg of 73 million kg followed by auction sales, which at 29,5 million kg, accounted for 40 percent of the total crop. Enditem