Zimbabwe Cancels Tobacco Auction Print Friendly Version

Source from:  Business Day (SA) 04/07/2005

"Farmers have rejected the prices...The police have been called" Antony Sguazzin and Brian Latham Harare - Zimbabwe's tobacco-auction houses cancelled the season's opening sales yesterday as farmers protested against a crippling drop in prices and the Zimbabwean dollar fell to a record low against the US dollar. Zimbabwe Tobacco Association CE Rodney Ambrose said yesterday about 150 disgruntled farmers forced the temporary shutdown of Tobacco Sales Floors, Zimbabwe's biggest auction house. The official exchange rate for Zimbabwe's dollar, which dropped 0,1% to 6086,78 to the US dollar at Monday's biweekly auction at the Reserve Bank of Zimbabwe, was not high enough to cover costs for growers. Farmers were paid in local currency for tobacco priced in US dollars, Ambrose said. Tobacco prices fell to 22c/kg yesterday. "The bulk of the farmers were small-scale farmers who had specially made the trip in," Ambrose said in Harare. "They really can't leave without making a sale. They can't even cover their transport costs at this price." Tobacco Sales Floor sales and marketing manager Ian Logan said in Harare yesterday: "Farmers have rejected the prices.… The police have been called." The central bank sold $11m after the Zimbabwean dollar dropped, the bank said on its website yesterday. Bids were accepted in a range of 6086,74 to 6086,78, against 6082,04 to 6082,14 at the previous auction. Brazil and India may be offering similar quality tobacco for less, Ambrose said. Enditem