Zimbabwe: Firm Suspends Tobacco Sales

Source from:  The Herald 05/31/2010

Harare - THE Zimbabwe Industry and Tobacco Auction Centre yesterday suspended auctions after farmers refused to sell their crop owing to "poor" prices being offered by merchants. Merchants were offering prices as low as US$1,10 per kg, down from US$4 which the crop fetched when the auction floors opened in February. The farmers declared they would not sell their crop and business ground to a halt. Zitac public relations officer Ms Kudzai Hamadziripi said they had no control over prices as these were determined on the free market. "The best people to comment on the issue of tobacco price are officials from TIMB (Tobacco Industry and Marketing Board). Ours is only to bring the farmer and the buyer together so that they can do their business on our premises," she said. TIMB acting chief executive Mr Meanwhile Gudu said the price slump was caused by two influential buyers who failed to deposit money in the auction floor's account on Wednesday. "As a result, we have to stop selling of tobacco today (yesterday)," he said. Mr Gudu dismissed reports that supply of tobacco had outstripped available cash. "Almost every cigarette in the world has Zimbabwean tobacco and it is difficult for us to reach a point where we say the supply is too high for the market," he said. Farmers said they were going to hold on to their crop until prices improved. Headlands farmer Mr Farai Chigodo said: "During the white farmer era, we never heard of excessive supply of tobacco and people were being paid handsomely. "We now believe that among the buyers there are some who are against the land reform programme and they are devising ways of bringing the new farmer down. "We are not going to let our crop go at such ridiculous prices and we are going to hold on to it until prices are reviewed upwards." Mrs Annah Chiipe of Marondera said the prices on offer were a pittance compared to expenses incurred during production and transportation of the crop to the auction floors. "The prices being offered here are very low and we are not sure if we will be able to go back to the land and produce a crop next season," she said. Agriculture, Mechanisation and Irrigation Development Minister Joseph Made yesterday said he was not aware that the auction floors had closed. However, it was understood that tobacco industry officials were locked in meetings with Agriculture Ministry staff yesterday afternoon. It could not be ascertained, though, what exactly they were discussing. Tobacco growers have for the past few weeks complained about low prices at the auction floors. Analysts said the falling prices were caused by high supply of the crop. Tobacco Growers Trust chairman Mr Wilfanos Mashingaidze advised farmers to be careful when selling their crop. "You should not sell your crop at giveaway prices as this is not viable. It is better to wait for better prices than take whatever price is being offered by buyers," he said. Over the past few years, tobacco growers boycotted auctions due to poor prices being offered. Last season, the crop fetched high prices, prompting more farmers to venture into tobacco. Tobacco has traditionally been the mainstay of Zimbabwe's cash crop production. Enditem