1,06 Million Kg Tobacco Goes Under the Hammer

Source from:  The Herald (Harare) Martin Kadzere 04/19/2005

A TOTAL of 1,06 million kilogrammes of flue-cured tobacco worth more than US$9 967 (about $6 million) have been sold at the country's tobacco auction floors since the commencement of this year's tobacco selling season, according to the Tobacco Industry and Marketing Board (TIMB). TIMB said the crop has been sold at an average price of US$0,93 per kilogramme since the opening of the marketing season two weeks ago. The price is still way below the US$2,90 per kilogramme prevailing at the end of trading in October last year. "The prices are very low and some farmers are still holding on to their crop hoping the prices will improve as the season progresses. "We are (therefore) expecting an improvement in deliveries," said TIMB. Selling of tobacco this season started on a low note with farmers vehemently protesting against the sharp drop in prices of the commodity resulting in the cancellation of the first day's sales. Farmers are demanding a higher price arguing that tobacco cultivation was not only labour intensive, but input costs had gone up since last year. They are demanding no less than US$3 a kilogramme which is way above the average US$0,20 a kilogramme currently being offered by the merchants. During the same period last year, a total of 6,9 million kilogrammes valued at US$1,2 million was put under hammer at an average US$1,79 a kilogramme. Zimbabwe is this year expecting to sell around 80 million kilogrammes of the golden leaf, up from 68 million kilogrammes last season. Despite the ongoing dispute over prices and doubts over quality, tobacco is expected to maintain its top ranking as the country's biggest foreign currency earner. The opening of the selling season was expected to ease the country's foreign currency challenges as merchants pay for the golden leaf in hard currency. As part of efforts to improve tobacco farmers' revenue, growers were expected to get a $2 000 support price for each kilogramme sold. In addition, they were granted exporter status, which means they are now entitled to receive the bulk of their earnings in foreign currency. Enditem