More Tobacco Sold At Auction Floors

Source from:  The Herald (Harare) Paul Nyakazeya 04/29/2005

DESPITE low prices stirring a raw at the start of this year's tobacco selling season, a total of 1,843 million kilogrammes of tobacco have gone under the hammer for the period ending April 20 compared to 1,25 million kg sold during the same period last year. According to the Tobacco Industry and Marketing Board's (TIMB) weekly report, for the period ending April 20, over 1,8 million kg have been sold fetching US$1 882 476 with sales averaging US$1,43 per kilo. Since prices vary according to what the local currency is fetching against the US dollar on a particular day, farmers have been complaining that this would bring instability in the marketing system. This year's tobacco selling season failed to take off as scheduled following a stalemate between farmers and merchants over prices. As has become the norm at the beginning of each selling season, tobacco farmers rejected and threatened to hold on to their crop until the situation was "in their favour". The prices fell from about US$2,90 per kg last year to between US$0,20 and US$0,90 per kg this year. When the selling season started, buyers were offering low prices with the lowest bid at US$0,15. The highest bid has fetched US$2,80 per kg. When the marketing season started in 2004, tobacco was being sold at an average of US$1,78 per kg. This was slightly above the price that was offered when the selling season opened in 2003 when farmers were paid an average of US$1,60 per kg. Last year the exchange rate varied and has been averaging between Z$4 300 and Z$4 500 to the greenback. The TIMB report noted that this year Burly Marketing Zimbabwe (BMZ) witnessed the largest share of business with a total of 706 942 kg going under the hammer. Tobacco Sales Floor (TSF) was second with 590 842 kg going through the auction floor. The Zimbabwe Tobacco Auction Centre (ZITAC) auctioned 545 758 kg. This year tobacco growers have two incentives as they are getting a $2 000 support price for each kilogramme sold and will also get part of their proceeds in hard currency, just like other exporters. The tobacco industry is a strategic foreign exchange earner in Zimbabwe accounting for more than US$220 million last year. The Minister of Agriculture, Dr Joseph Made, has since emphasised the importance of tobacco as a major foreign currency earner on the eve of the expected selling season. He emphasised that farmers in the 2005/6 tobacco season should aim for at least 250 million kg, code-named "Vision 250". Enditem