Tobacco Sales to Surpass 42 Million kg Target

Source from:  The Herald 07/21/2009

TOBACCO sales look set to surpass the anticipated 42 million kilogrammes this season, with 41,4 million kg already sold through auction and the contract system as of last Friday. The floors will be open until the end of August and usually more tobacco is sold towards the end of the selling season as growers anticipate higher prices then. Growers have so far pocketed US$124 million out of the sales. The bulk of the sales are coming in through contract. Tobacco Industry Marketing and Board said tobacco has been selling at an average US$2,98 since the selling season opened in May. The number of bales laid to date amounted to 528 842 and of these, 487 630 bales were sold. Of the three floors, Tobacco Sales Floor sold the highest amount of tobacco amounting to 5,9 million kg worth US$17,9 million followed by the Zimbabwe Industry Tobacco Auction Centre that sold 4,3 million kg worth US$12 million. Burley Marketing Zimbabwe sold the least amount of tobacco at 4 million kg worth US$12,2 million. TIMB chief executive, Dr Andrew Matibiri said prices, which had somewhat softened over the past few weeks, had begun to pick up. "Deliveries at the auction floors have slightly decreased while there is an increase of tobacco deliveries for the contract system," said Dr Matibiri. This season, 90 percent of the crop was expected to come from the farmers under contract since most of those on the conventional side could not afford inputs such as fertilisers. A target of 65 million kg was set for the 2008/9 season but due to challenges such as shortage of inputs, constant electricity cuts, coal shortages and the high rate of inflation production was severely affected. This season tobacco growers are happy with the payment system that saw them getting US$1500 on spot with the balance being deposited in their foreign currency accounts. This season, a grower can choose not to encash any portion of his or her sales proceeds, and have his entire proceeds transferred into the FCA account, by informing the auction floor before the sale. Last season farmers had to spend days camping at the floors waiting to encash their cheques while the banks were giving small amounts that could only be used for transport to and from the farm. Enditem