Tobacco sales hit $316m

HARARE - Zimbabwe has auctioned tobacco worth $316 million since the opening of the 2014 selling season mid-February compared to $295 million realised during the same period last year.

This year’s season opened on a low note, with depressed prices at below $3 per kilogramme (kg).

However, 96 million kg of tobacco have been sold so far, a 21,04 percent increase in the 45 days into the marketing season.

In the previous season, 79,4 million kg were sold in 44 days into the season, realising $295 million, which also shows that prices obtaining this season are slightly lower compared to last year during the same period.

Figures released by the Tobacco Industry and Marketing Board (Timb) out of the 96 million kgs sold this season, 64 million kgs came from contract farming while the auction system had 30 million kg.

Tobacco Sales Floor (TSF) held 14,7 million kgs with Boka Tobacco Floor handling 7,3 million kg and Premier Tobacco Floor 7,6 million kg.

Prices are averaging $2,87 per kg under the auction system while contract prices are averaging $3,49.

This year, 61 582 bales have been rejected compared to 60 369 bales rejected last year.

Despite low average prices obtaining on the market, tobacco deliveries have increased with the quality of the golden leaf improving, showing confidence that the target of 180 million kgs can be achieved this season.

Agriculture experts warn that the hype around tobacco could be weaning down due to depressed prices prevalent in the current marketing season.

In the past few years high prices and a growing demand for Zimbabwe’s tobacco crop on the international stage has led to small-scale farmers ditching food cereals in favour of the cash crop that was once the preserve of a small clique of white commercial farmers.

Nearly 88 000 tobacco growers have registered to sell their crop this season, a 29 percent increase from the 65 000 new growers that planted the crop last year.

The agriculture sector is expected to grow by nine percent this year, with tobacco largely fuelling the growth.

The ministry of Agriculture says tobacco earnings contribute about 20 percent to the country’s gross domestic product and the crop accounts for 40 percent of exports.

However, Zimbabwe’s increased tobacco production has raised concerns of food security in a country where, according to the World Food Programme, more than 2,2 million people are facing starvation.

Rodney Ambrose, the Zimbabwe Tobacco Association chief executive, said his organisation was addressing the anomaly of cash crops taking precedence over staple crops.

“The shortage of staples is man-made, but as the tobacco industry we are encouraging our farmers to grow other staples such as maize so that we don’t have single-crop reliance,” he said.

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