Zimbabwe: Tobacco Inflows Likely to Miss Target

Source from:  Financial Gazette (Harare) 9 September 2008 09/16/2008

The country's three tobacco auction floors received 502 054 bales with a mass of 40 882 801 kilogrammes of the golden leaf in the 80 days to Tuesday this week, according to statistics provided by the Tobacco Industry and Marketing Board (TIMB). TIMB's statistics translated to US$131 487 954 in foreign currency revenue generated from the sales with about one month left before the tobacco marketing season closes. The Zimbabwe Tobacco Auction Centre (Zitac) received the bulk of the auctioned golden leaf, purchasing 85 218 bales with a mass of 4,9 million kilog rammes worth US$16 million. Tobacco worth US$15,4 million was auctioned through the Tobacco Sales Floor (TSF) while Barely Marketing Zimbabwe (BMZ) had auctioned tobacco worth US$16,1 million, with the remainder being transacted through contract farming. Contract farming, which could overtake auction sales due to rising costs of tobacco production, accounted for US$83 938 289 worth of tobacco sales during the period, the TIMB said. Of the total bales traded so far, BMZ received 68 665, TSF received 68 621 kilogrammes while 279 550 bales were traded through contract farming. Tobacco is the country's second largest foreign currency earner, accounting for 18 percent of the US$759 million generated from export shipments in the six months ending June 30. The entire mining sector contributed 53 percent of this revenue while the key manufacturing and agricultural sectors contributed 15 percent and 11 percent respectively. Zimbabwe is this year expected to receive about 70 million kilogrammes of tobacco. Analysts predict it will be highly unlikely the 70 million kilogramme target will be achieved in just less than 30 days of trade remaining. Last season about 50 million kilogrammes were traded through both the auction floors and contract farming. The tobacco sales season opened on a bad note this season as hundreds of farmers failed to cash their cheques on time until the Reserve Bank of Zimbabwe intervened in the second month of trade in May. Enditem