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February 21, 2011

Zimbabwe tobacco selling season opens with strong output, firm prices

by Gibbs Dube

Zimbabwe’s 2011 tobacco-selling season has started in Harare amid hopes that sales will exceed the projected output of 170 million kilograms.

Tobacco Industry and Marketing Board executives said at least 60 percent of the crop will be sold under contract with the remainder going on the block in auction sales.

The executives said they expect the average tobacco price to be more than US$3 per kilogram and that it will remain firm until the end of the selling season. The average tobacco price last year was US$228.

The industry executives said tobacco output was boosted by favorable rains and funding from Chinese sources which allowed an increase in hectares planted.

Output has steadily risen from 58 million kilos in 2009 to 123 million kilograms last year amid political and economic stabilization and the adoption of a hard currency regime.

Economist John Robertson cautioned however that despite such gains, Zimbabwe has far to go to reclaim production levels seen in the late 1990s.

“Some of the sellers are coming to the tobacco floors early this year but I think they are concerned that the prices might fall later in the season,” said Robertson.

More than 60,000 farmers registered with the marketing board this year, up from 52,000 in 2010. Sources noted concern chronic power outages might compromise crop quality.


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