Zimbabwe Announces New Price Support for Tobacco

Source from:  english.peopledaily.com.cn 04/26/2006

The Reserve Bank of Zimbabwe (RBZ) on Monday announced a new price support framework for the 2005/06 tobacco crop that would see early deliveries to the auction floors earning a 35 percent bonus. The RBZ governor, Gideon Gono, said the new support price would reward quality, ensure grower viability and encourage early delivery of green tobacco to the auction floors. "With effect from 25 April 2006, tobacco growers who sell green leaf tobacco at the auction floors, by 31 July 2006 will be entitled to a 35 percent delivery and early delivery bonus," the governor said, adding that the support framework would be based on the actual value of tobacco sold on the auction floors. He pointed out that the cut-off date would take into account unanticipated logistical challenges experienced by growers during the preparation of the crop for marketing. Tobacco sales made after the cut-off date and before 31 August shall attract a 15 percent bonus and thereafter the element of a bonus would not apply. The governor claimed that under the framework, growers would with immediate effect be paid for all tobacco sold at the auction floors at the prevailing Interbank rate. As a result, he said the 15 percent Tobacco Growers Retention Scheme would be discontinued. Gono said the current initiatives to mobilize foreign exchange would ensure that this scarce commodity was made available to the tobacco industry for inputs which account for between 30million and 35 million U.S. dollars. The support framework is also expected to allow farmers to unlock working capital resources in preparation for the 2006/2007 tobacco growing season. Gono urged tobacco merchants to play their part in supporting the initiative through a combination of early draw-downs of facilities, as well as the avoidance of collusion on the floors. "Where negative collusive practices are detected, the authorities reserve the right to take swift corrective measures that may be detrimental to the merchant(s) concerned," he said. Meanwhile an official from the Tobacco Industry and Marketing Board confirmed that all was set for the selling season that commences on Tuesday. Enditem