Tobacco Sales Rake in US$107M

Source from:  The Herald (Harare) Leonard Makombe 08/04/2004

TOBACCO farmers have sold at least 54 million kilogrammes of the golden leaf valued US$107 million at auction floors and through the contract system since the start of the selling season in April. More foreign currency inflows are expected once the country starts exporting the processed crop. The auction system continues to account for the bulk of the crop, with a total of 42 702 800 kg having gone under the hammer by close of business last Wednesday. The contract system, which is in ts maiden season, has accounted for 10 455 954 kg. The price for the leaf continues to fetch higher on the field through contract sales compared to the traditional auction system. By close of business last Wednesday, a kilogramme of the golden leaf at the auction floor was selling at an average US$1,99 which is marginally lower than the US$2,13 per kg for contract growers. Even the wastage rate was significantly lower for the contract system crop at 0,63 percent compared to 9,42 percent at the auction floor. This year's tobacco selling season has been active for 87 days and is expected to run until the end of this month. The bulk of the projected crop has already been delivered either to the auction floors or to the selected points for contract sales. What is left is only a handful, which is estimated to be less than 11 million kg. It is expected that a total of 60 million kg of tobacco would be delivered this year, reflecting a 25 percent decrease from last season's total production. Stakeholders in the industry have however, projected a rebound as there have been measures aimed at ensuring that the production of the crop reaches the 250 million kg levels. "The market closed much firmer than in week 13 with the majority of offerings faring well. "The average price for the week at auction floors increased to US$2,04 from US$2,00 in the previous week while at contract sales it remained the same at US$2,16," said the Tobacco Industry and Marketing Board (TIMB) in its report for the 14th week. Demand for good quality ripe styles was strong with prices ranging between US$2,90 and US$3,00. Enditem