42m kg Tobacco Expected for Auctioning

Source from:  The Herald 04/28/2009

THE 2009 tobacco-selling season is expected to start in the second week of May, with 75 percent of the crop to be delivered this year expected to be sold through contracts. Auction sales would open on Thursday 7 May with contract sales starting the next day. Deliveries to the auction floors are expected to start on Monday 4 May. The Tobacco Industry Marketing Board acting chief executive Dr Andrew Matibiri said they were expecting sales to be concluded within 80 selling days or at the least by 28 August. At least 42 million kg of tobacco is expected to be delivered to the floors this year. During the last season about 67 percent of the total deliveries of 47 million kg were sold through the contract system. The dual system would be in operation for the fourth successive season this year. Dr Matibiri said to ensure orderly marketing, growers producing for auction would sell their entire production through auction sales. "As is usual more than one contractor could have funded a contracted grower. "Accordingly, an agreed arrangement of sharing the crop among contractors and loan recovery from contract growers will be operated. "However, the overriding principle will be that contractors will be obliged to purchase tobacco equivalent to the level of indebtedness of the grower. Thereafter transactions will be by mutual consent of the parties involved," he said. In addition, all transaction on sales floors would be denominated in United States dollars and accordingly, growers will be paid their sales proceeds in US dollars, less statutory payments, selling commissions and stop order deductions, he said. "The default payment modality is that all growers will be given a stated amount as cash with the rest being deposited into their Foreign Currency Account. "However, a grower can elect not to encash any portion of his/her sales proceeds, and have his entire proceeds transferred into the FCA account, by informing the auction floor before the sale," said Matibiri. At least 16 contractors have been licensed to conduct contract sales at the floors. They include Chidziva Tobacco Processors, Gold Driven Investments (Pvt) Ltd, Gwaai Leaf Tobacco Company, Intercontinental Leaf Tobacco Company, Northlee Investments (Pvt) Ltd, Mashonaland Tobacco Company, Ripthtra Investments (Pvt) Ltd and Saltlakes Holdings. Other contractors include Shasha Tobacco P/L, Tian Ze, Western Tobacco Company, Zesa Enterprises, Zimbabwe Farmers Development Company and the Zimbabwe Global Agric Development, Zimbabwe Leaf Tobacco Company and Zimbabwe Tobacco Growing Company. Enditem