Zimbabwe: 130 Million KGs Tobacco go Under the Hammer

Source from:  Zimbabwe Independent 08/15/2011

A TOTAL 129,5 million kgs of flue-cured tobacco valued at US$ 355,5 million has gone under the hammer at the country's three auction floors since the beginning of the selling season in February, figures released by the Tobacco Industry and Marketing Board (TIMB) show. According to TIMB, the deliveries were 11,79% more than the 115,8 million kgs valued at US$338,2 million sold in the same period last year. The average price at this year's selling season was US$2,75, a 5,98% decline from last year's average price of US$2,92. Of the 129,5 million kgs sold, Tobacco Sales Floor (TSF) handled 32,1 million kgs valued at US$80,3 million, while Boka Tobacco Floors (BTF) sold 15,1million kgs valued US$34,7 million. Millennium Tobacco Floor (MTF) handled 9,7 million kgs of tobacco valued at US$23,6 million. Contract farmers accounted for 72,4million kg valued at US$216,8 million. BTF and MTF started auctioning a month and half after the selling season started. Of the 1 669 022 bales laid, a total of 1 552 067 were sold while 116 955 were rejected. According to TIMB, Zimbabwe is expecting 177 million kgs this year from 123 million kgs which earned the country US$347,8 million last year. Zimbabwe is the world's sixth-largest exporter of the flue- cured Virginia tobacco. It lags behind Brazil, India, the United States, Argentina and Tanzania, according to the website of Universal Corp, the world's biggest tobacco-leaf merchant. Fortunes in the tobacco sector have been particularly buoyed by adoption of the hard currency regime in the country. Previously, tobacco growers had suffered from delayed payments against the background of an accelerated erosion of value on the domestic currency which was under severe assault from runaway inflation. The tobacco-selling season opened early this year after the TIMB tried to cushion farmers who needed ready cash. The industry was prepared for high volumes of tobacco after six other suppliers of tobacco wrapping material were licenced to avoid shortages that occurred last season. No shortage of the packaging material was reported this season. However, the booking system put in place to reduce congestion at the auction floors was not as effective as growers continued to bring their tobacco without registering. The board had decentralised its booking offices but still some farmers failed to take advantage of the arrangement. This resulted in congestion at the Tobacco Sales Floor, which was the only operational auction floor when the selling season opened. Boka Tobacco Floors opened late due to renovations while Millennium Tobacco Floors also came on board although it took long to clear the congestion. The issue of pricing also came up this season as the sales had to be temporarily suspended after buyers started offering prices as below as US$0,10 to US$0,50. Farmers complained over the decline in prices as they expected prices to continue firming as the quality of the leaf improved. At the beginning of the selling season, tobacco was selling at prices ranging between US$3,50 to US$4,50 per kg during the early days of the selling season. Enditem