Zimbabwe: 22 Years On, Prices Down

Source from:  Tobacco Reporter 07/20/2018

With Zimbabwe’s flue-cured tobacco marketing season drawing to a close, the average price paid to growers so far is lower than it was during the full season of 1996.

That is; over the course of 22 years, getting on for a quarter of a century, the grower price has fallen.

Not by much. It’s down by 0.7 percent – from US$2.94 in 1996 to US$2.92 so far this season.

But given the price increases that tobacco manufacturers have imposed on smokers during the past 22 years, the fall in grower prices is huge.

A July 15 story in the Sunday Mail that was relayed by the TMA had it that, according to figures from the Tobacco Industry and Marketing Board (TIMB) growers had been paid US$673 million for the 230.4 million kg of flue-cured they had delivered so far, an average price of US$2.92 per kg.

By the same point of the 2017 marketing season, growers had been paid US$509 million for the 172 million kg they had delivered, an average price of US$2.96 per kg.

That is, year-on-year, the average price has fallen by US$0.04 per kg, or 1.3 percent.

The low prices need come as no surprise. In May, a story in The Daily News said that the TIMB had suspended the operations of flue-cured tobacco buyers accused of giving growers a raw deal.

The suspensions followed complaints by growers who said they were being short-changed by some of the buyers.

TIMB spokesperson Isheunesu Moyo reportedly acknowledged receipt of the complaints from the growers. “We have since stopped some firms’ operations … while investigations are being carried out pertaining to the complaints,” Moyo said.

Takura Mukomberanwa of Hurungwe West was said to have told the Daily News that growers were calling on the TIMB to investigate a “litany of malpractices such as unauthorized insurance deductions”.

Mukomberanwa said that, as things stood, it seemed that the TIMB did not care about what growers were going through.

Also in May, the associate editor of the Manica Post, Obert Chifamba, described Zimbabwe’s auction market for flue-cured as defying logic.

Chifamba said that, logically, prices would rise as the quality of the tobacco increased after the delivery of the early harvestings, but that the sad reality seemed to suggest that as the quality got better, the prices either took a tumble or hit a ceiling – a ceiling of steel or granite.  Enditem