Tobacco sales reach $88m

HARARE - Zimbabwe has auctioned 28,6 million kg of tobacco worth $88 million since the beginning of the 2014 selling season mid-February.

The Tobacco Industry and Marketing Board (Timb)’s latest statistics, however, indicated that the commodity’s price has remained depressed at an average $3,07 per kg, 16 percent down from last season’s $3,67.

By end of day 24, the Tobacco Sales Floor (TSF) had sold 4,3 million kg valued at $12 million at an average price of $2,76 per kg.

Boka Tobacco Auction Floor (Boka) handled 2,3 million kg worth $5,9 million at an average price of $2,50 per kg.

Premier Tobacco Auction Floors (PTF) has to date auctioned 2,1 million kg valued at $5,2 million at an average of $2,53 per kg while a total 20 million kg valued at $65 million has gone under the hammer through contract farming at an average price of $3,26 per kg.

TSF mainly caters for large-scale tobacco farmers while Boka accommodates small-holder farmers. On the other hand, PTF deals with medium to large-scale growers.

TIMB expects 180 million kg of tobacco to be sold this year, 15 million kg more from last year.

Zimbabwe’s tobacco production has been steadily improving since 2009 due to an increase in hectarage, better prices and favourable rains.

The country is the biggest producer of leaf tobacco in Africa and the world’s fourth-largest producer of the flue-cured type after Brazil, China and the United States of America.

Since cigarette production in Zimbabwe is on a small scale, the major activities in the tobacco industry are the growing, curing and subsequent handling and distribution.

About 90 percent of the commodity is exported.

The crop normally accounts for more than 50 percent of agricultural exports, 30 percent of total exports and nearly 10 percent of GDP.

In terms of revenue, since 1990 total annual sales have ranged between $270 million and $593 million.

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