Zimbabwe: Tobacco Deliveries Set to Improve

Source from:  The Herald (Harare) 11 August 2008 08/12/2008

TOBACCO deliveries are set to improve marginally following the introduction of the new currency and the review of withdrawal limits. The issue of withdrawal limits had been one of the sticking points that had resulted in a marked decline in deliveries as farmers protested against the withdrawal limits that existed then. Most farmers felt that the withdrawal limits had been eroded by inflation and that they were now negligible while some had insisted on being paid all the proceeds from the sale of their tobacco in cash. The farmers had argued that the low withdrawal limits were also making it impossible for them to procure inputs, most of which were only found on the parallel market. The impasse over the withdrawal limits at one point resulted in a two-day closure of two of the country's three floors last month. Farmers who spoke to Herald Business commended the introduction of the new currency, but called for a constant review of withdrawal limits. Tobacco Industry Marketing Board's acting chief executive, Dr Andrew Matibiri said although the issue of withdrawal limits had been dealt with, there were still other outstanding factors that still needed to be considered. These included the availability of diesel for transporters and transport costs. "Transport costs have risen so much that farmers with fewer bales no longer see the point of transporting their produce to the floors," he said. Meanwhile earnings from tobacco sales since the start of the season have topped the US$100 million to US$116,1 million. A total of US$125,8 million was earned during the same period last year. According to latest statistics released by the TIMB the money was earned from the sale of 36,3 million kg of tobacco at an average price of US$3,19. During the corresponding period last year a total of 53,7 million kg had been sold at an average price of US$2,34. Despite the lower prices offered under contract sales at US$3,13 per kg, this mode accounted for the bulk of the crop that has been sold so far with 23,4 million kg having been sold for US$73,6 million. Individual sales with a price of US$3,30 grossed US$42,5 million from the sale of 12,8 million kg. The total number of bales laid to date amounted to 470 174 and of these 442 211 went under the hammer. During the corresponding period last year 592 712 bales were sold from 618 396 that were laid. Zitac led the other floors in terms of sales despite offering US$3,20 per kg as opposed to US$3,37 a kg that was being offered at the other floors. A total of 4,6 million kg were sold at Zitac grossing US$14,8 million while 4,1 million kg were sold at Burley Marketing for US$14,1 million and 4 million kg were sold at Tobacco Sales Floor for US$13,6 million. At least 75 million-kg are expected to be delivered to the auction floors this season. Enditem