Zimbabwe: No Money for Tobacco Crop

Source from:  Financial Gazette (zw) 07/02/2004

THE Tobacco Industry and Marketing Board (TIMB) is making frantic efforts to source funding for the next tobacco crop, The Financial Gazette has learnt. According to the board, loans will be disbursed through its established Tobacco Input Credit Scheme (TICS) to farmers as soon as a facility is in place. The TIMB said although the loan repayment facility was encouraging, farmers should make payments by July 31 to boost the loan scheme, failure of which would attract an interest rate of 50 percent and additional administrative costs. "Once new funding is available, TICS will only entertain applications from those growers who will have fully repaid their loans on time. Depending on the amount of funds available, consideration will also be given to extend loans to deserving new growers," the TIMB said. Zimbabwe had exported more than 32 500 tonnes of the golden leaf worth over US$111.6 million to more than 30 destinations around the world as of the end of May despite projections of a small crop volume this season. Tobacco output is this year expected to go down by 32 percent from last year's 82 million kgs because of a shortage of inputs and the unavailability of finance due to lack of collateral from the new farmers. The government's land reform, which kicked off in 2000, has seen the country's tobacco output falling drastically compared to other world giants such as the United States of America and Brazil. Zimbabwe also lost its position as one of the world's top five producers of the golden leaf due to the sharp decline in output from an estimated peak of 237million kgs in 2000 to a paltry 66 million kgs this year. The European Union is still the leading importer of Zimbabwean tobacco, followed by the Far East, recording seasonal volumes of 12 000 tonnes and 11 000 tonnes respectively. "Due to the smaller crop available this year, merchants have not yet begun processing at full steam and therefore monthly export volumes remain low for the moment," the TIMB said. The value of tobacco sold to date is US$61.5 million. The wastage rate (rejection) was nine percent, much the same as in 2003. The major reasons for rejection were price consideration, which accounted for 3.5 percent, mixed tobacco, two percent, and mouldy tobacco, 1.8 percent. World production in 2004 is projected at 3 743.3 million kgs, a four percent increase over the 2003 estimated production of 3 598.2 million kgs. Enditem