Zimbabwe: Over 500 000 Tobacco Bales Sold

Source from:  Financial Gazette (Harare) 13 September 2008 09/19/2008

ZIMBABWE'S three tobacco auction floors received 525 168 bales with a mass of 42 719 424 kg of the golden leaf in the 87 days of trade, which ended on Tuesday, according to statistics provided by the Tobacco Industry and Marketing Board (TIMB) yesterday. Tuesday's totals sho-wed just two million more bales had been traded since Tuesday last week. Reports this week said tobacco deliveries had been affected by high transportation costs and fuel shortages. About one month is left before Zimbabwe's tobacco marketing season closes. The TIMB's statistics translated to US$137 766 963 in foreign currency revenue that had been generated by the economy through tobacco trade at the end of business on Tuesday this week. Zitac has so far rece-ived the bulk of the auctioned golden leaf, managing to purchase 87 561bales with a mass of 5 072 963 kg worth US$16, 4 million. Tobacco worth US$16,1 million was auctioned through the Tobacco Sales Floor (TSF) while Barely Marketing Zimbabwe (BMZ) had auctioned tobacco worth US$17,3 million with the remainder being transacted through contract farming. Contract farming, which is fast turning into the leading system of trade in tobacco, traded the golden leaf worth US$88 million, the TIMB said. Of the total bales traded so far, BMZ received 72 861, TSF received 71 258 while 293 488 bales were traded through contract farming. Tobacco is the country's second largest foreign currency generating resource, accounting for 18 percent of the US$759 million generated from export shipments in the six months ending June 30 2008. 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 kg of tobacco, meaning with about a month left of tobacco marketing just over 50 percent of this figure has been received. Analysts predict it will be highly unlikely the 70 million kg target will be achieved in just less than 30 days of trade left. Last season about 50 million kg 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. But the multiple problems dogging the tobacco farmer have resulted in the earnings thereof being lower than those of the last season despite an array of incentives that have been put in place to encourage farmers to deliver. These include the interbank exchange rate and a better average price. Enditem