Zimbabwe: TIMB Seeks Burley Tobacco Finance

Source from:  Zimbabwe Independent 07/04/2011

The Tobacco Industry and Marketing Board is seeking US$2,5 million to finance burley tobacco deliveries set for next week, as production of the air-cured crop continues on a downward trend, businessdigest has learnt. Following the closure of Burley Marketing Zimbabwe (BMZ), an auction floor that was dedicated to the marketing of burley tobacco, growers are next week expected to sell the brown leaf to Zimbabwe's second largest floor by volumes, Boka Tobacco Auction Floors. Burley tobacco growers -- who owned BMZ -- sold the floor to Savannah Tobacco, a cigarette manufacturing company, last year. Tobacco Industry and Marketing (TIMB) Board CEO Andrew Matibiri this week said plans were underway to source finance for the marketing of burley tobacco ahead of a scheduled date. Matibiri said deliveries for the air cured burley tobacco are expected to be between 500 and 700 tonnes, nearly twice as high as the 261 tonnes delivered in the last marketing season. Independent forecasts show that the figure could be as high as 1 000 tonnes due to a better cropping season last year. "We are now ready to sell the crop and we should be able to do that next week once the banks put in the finance," Matibiri said. Production for the crop has over the years been going down owing to limited incentives for growers. Burley tobacco deliveries reached an all-time peak of 16 million kilogrammes in the 1990's. At that time, Zimbabwe was competing with Malawi, which has since outpaced it. Industry players said limited financing and the absence of a viable policy to promote production of the crop accelerated the gradual decline in local deliveries. Experts also said the land reform programme, which saw white commercial farmers losing vast tracts of land, resulted in communal and small scale farmers switching to high earning flue-cured Virginia tobacco despite the relatively lower costs of producing burley tobacco. Edward Tome, Tobacco Association of Zimbabwe treasurer-general, said apart from low demand on burley, the crop had historically never had good prices. Virginia tobacco is averaging US$2,80 per kilogramme and forecasts show that the average price for burley could be as low as US$0,80 per kilogramme. "The future of burley tobacco is bleak unless government puts in place deliberate policies to fund production," Tome said. Because of this, small scale farmers that erstwhile grew burley before the land reform exercise were no longer finding it profitable to grow the crop because of low returns. Traditionally, burley growers were self-financed and because of the low returns, only a few have continued growing the crop. Official statistics show that 659 burley tobacco growers registered for the 2011 marketing season, with Mashonaland Central and Manicaland provinces accounting for nearly 80% of the total growers. Meanwhile, submissions for applications for would-be tobacco auction floor operators are expected to be closed today. The TIMB said 20 applications were received and only Premier Tobacco had to date completed the application forms. Enditem