Zimbabwe: Tobacco Deliveries Improve

Source from:  The Herald (Harare) 7 May 2008 05/08/2008

Tobacco deliveries to the auction floors have improved over the last few days as the impasse over pricing has subsided. At the Tobacco Sales Floors yesterday, tobacco was fetching between US$3 and US$4 per kg, a slight decline from US$5 last week, while auction sales at the Burley Marketing Zimbabwe were in the region of US$3 per kg. Contract sales at TSF were ranging between US$1,50 and US$3 per kg. While auction sales passed without incident, some small-scale contract farmers protested over prices for their tobacco. Some farmers alleged that contractors were shortchanging them as they were being made to sell their tobacco under contract when they had received little support from contractors. Mr Hatikodza Kunyara and Mrs Marry Mukunga from Macheke said they were surprised to discover that they were being forced to sell their tobacco to contractors when they had not received any support from them. "I had to source all the inputs by myself and now that I have brought my crop I am told that I have to sell it on contract at a give-away price because I signed an agreement with the contractor who never honoured his part of the deal, that is daylight robbery," fumed Mrs Mukunga. Other farmers also complained that they were receiving a raw deal in that they had to wait for days in some instances before their tobacco was sold. Saltlakes chief executive Mr Temba Mliswa who was present during the contract sales at the Tobacco Sales Floor, said the impasse over prices was due to the absence of a pricing matrix that was supposed to be supplied by the Tobacco Industry Marketing Board. He said this would give direction on prices, which in turn would assist farmers to make a decision to sell or not to sell. "Farmers are committing the same mistakes that they committed last year of rushing to sell all their tobacco yet this time around there is movement on the exchange rate which affords them time to wait unlike last year," he said. Mr Mliswa said his company was handling an average of 200 bales per day. Tobacco Growers Trust president Mr Wilfanos Mashingaidze expressed satisfaction at the way sales were being conducted. "The differences between contract and auction prices is expected, farmers who did not over-borrow will reap huge rewards while those who did will find it difficult to pay back," he said. He urged farmers who are on contract to continue on the system until such a time that they would be able to stand on their own. Contract sales proved to be the best mode through which tobacco was marketed, with the system accounting for 60 percent of the 73 million kilogrammes of flue-cured tobacco sold last year. 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. 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. Enditem