Zimbabwe: Stakeholders Raise Concern Over Tobacco Prices

Source from:  The Herald 03/29/2012

Stakeholders in the tobacco sector yesterday expressed concern over the stagnation of tobacco prices that have failed to breach the US$5 per kilogramme mark. The tobacco-selling season opened in February. Tobacco Industry and Marketing Board chief executive Dr Andrew Matibiri, yesterday said he was worried by the fact that prices that started with a lot of promise had suddenly stagnated. Dr Matibiri said he had discerned a ceiling in the pricing structures, something he felt could be a conspiracy by buyers to short-change farmers even though the quality of the leaf had vastly improved. "Prices have only gone as high as US$4,99 per kilogramme at most auction floors, while at the contract side the highest has so far been US$5,20 for a kilogramme. "Initially the prices were not bad considering that the earliest deliveries comprised primings that are naturally not of high quality. The tobacco that is coming in now is of a higher quality so it should see a rise in prices too," said Dr Matibiri. When the auction floors opened early this year prices were fluctuating between US$4,90 and US$4,99 per kilogramme for the highest grade, which farmers and other stakeholders felt was good. But with prices showing no sign of firming beyond that mark, TIMB and farmers now suspect buyers could be conspiring to get even the best tobacco at the same prices. "I am not happy with the situation. I think prices should have gone beyond US$5 for a kilogramme by now. The quality of the leaf had changed for the better so this should be matched by better prices too," Dr Matibiri commented. Premier Tobacco Auction Floors managing director Mr Philemon Mangena said the prices were good though he expected them to continue firming. "The prices are good considering that most of the tobacco coming in is a blend of good leaf and primings. Farmers are not complaining so that is a positive sign," he said. Millennium Tobacco Floors marketing director, Mr Kudzai Hamadziripi said the prevailing prices had become cause for concern. Enditem