Tobacco Sales Disappointing

Source from:  Zimbabwe Standard (Harare) Theodisa Mbengano 05/10/2005

A PALTRY 4,3 million kgs of tobacco has been sold at the country's three auction floors so far this year as growers hold on to their crop in anticipation of a review in prices. This year's crop is 11% down from the crop that had passed through the auction floors at the same time last year. Subsequently the crop, formerly Zimbabwe's prime export crop, has only raked in a paltry US$4,9 million, a 47% decline from US$9,4 million earned in the same period in 2004. The rate of wastage was 3% higher this year and the amount of rejected bales was also higher either as a result of the bales being oversize, overweight, underweight, too wet or too dry among other things. The sharp decline in the sales can be attributed to the unwillingness by growers to release their golden leaf anticipating a rise in the prices which they are saying is "peanuts" as compared to the cost they incur to produce the crop. Growers say it cost them over ZW$20 000 to produce a kilogramme of tobacco but the US dollar prices at $6,200 would give them returns of about $11 000 only. As had been the norm at the beginning of the season, farmers would reject prices and withhold their crop in the first few days and then out of desperation give in to the given price, but this is different now as farmers are refusing to be taken for granted. Sales statistics from the Tobacco Industry and Marketing Board (TIMB) showed that tobacco deliveries were still unstable as late as Wednesday last week. Kumbirai Mufanebadza, the marketing manager of TIMB, said sales had been increasing over the past two weeks but they had again slowed down after the Worker's Day holiday. "Over the past two weeks volumes have been increasing but now they are slightly low, maybe it's the holiday [workers day] and we hope the situation will improve.," said Mufanebadza. Most farmers still expressed optimism as they hope that things will be resolved in the ongoing discussions between the farmers and the government over the price issue. The Zimbabwe Commercial Farmer's Union (ZCFU) President Davison Mugabe a tobacco farmer in Banket said he was holding on to his crop as he was awaiting the outcome of the ongoing negotiations. He also said viability of farmers was a worrying issue ,which should not be overlooked if the production of the golden leaf was to be sustained. "Zimbabwe still need tobacco and we still want to grow the crop but if the situation does not change farmers will feel threatened and might think of diverting their attention to other crops." Mugabe said. Zimbabwe this year is expecting an output of around 85 million kg's, a sharp decline from the country's peak of 236 million kg's in 2000 which brought in over US$400 million in foreign currency. Enditem