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July 26, 2011

Zimbabwe: Tobacco sales surpass 2010 levels as recovery continues

by Elita Chikwati

The volume of tobacco sold so far has surpassed last season's cumulative output, an indication that Zimbabwe is slowly retaining its status as one of the leading tobacco producers in the world.

After 98 days of sales, tobacco output now stands at 123 147 753kg, marking the second time in eight years that tobacco production has surpassed the 100 million kilogrammes mark.

Last season, 119 813 490 kilogrammes were sold at the close of the auction floors. The marketing season lasted eight months and was spread over 127 days. The continuous increase in tobacco production has been attributed to an increase in the number of tobacco growers as a result of the land reform programme. High prices offered for the crop have also attracted many farmers to go for tobacco farming.

Tobacco Association of Zimbabwe president, Mr Stan Kasukuwere, said this was a positive development ..but, "Growers lack financial support and are struggling to produce. I wonder what could have been the output had the farmers been adequately financed."

The tobacco-selling season opened in February this year after the Tobacco Industry and Marketing Board tried to cushion farmers who needed ready cash. The industry was prepared for high volumes of tobacco after six other suppliers of tobacco wrapping material were licenced to avoid shortages that occurred last season.

No shortages of the packaging material was reported this season. However, the booking system put in place to reduce congestion at the auction floors was not as effective as growers continued to bring their tobacco without registering. The board had decentralised its booking offices but still some farmers failed to take advantage of the arrangement.

This resulted in congestion at the Tobacco Sales Floor, which was the only operational auction floor when the selling season opened. Boka Tobacco Floors opened late due to renovations while Millennium Tobacco Floors also came on board although it took long to clear the congestion.

The issue of pricing also came up this season as the sales had to be temporarily suspended after buyers started offering prices as below as US$0,10 to US$0,50. Farmers complained over the decline in prices as they expected prices to continue firming as the quality of the leaf improved. At the beginning of the selling season, tobacco was selling at prices ranging between US$3,50 to US$4,50 per kilogramme during the early days of the selling season.

TIMB chief executive Dr Andrew Matibiri said the season is still progressing and the matter of a closing date has not yet come up.

The country expects 170 million kilogrammes to go under the hammer this season as the country continues to register more tobacco growers.

The Herald

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