Tobacco farmers rake in US$7m in 3 days

Source: Tobacco farmers rake in US$7m in 3 days | Herald (Top Stories)

Elita Chikwati  Senior Agriculture Reporter 

Tobacco growers have earned a cumulative US$7 million from the sale of 2,6 million kg of tobacco in the first three days of the 2022 marketing season. 

This comes as 95 percent of the crop is expected to be sold through the contract floors and five percent through the auction floors. 

Auction floors officially opened on March 30 while contract floors opened the following day. 

Prices are this year expected to be firm because of reduced volumes as a result of the bad rainfall season. 

On the first day, the average price was US$2,58 per kilogramme and on the second day the average price had increased to US$2, 62 per kilogramme and on Friday has increased to US42,64 per kilogramme. 

According to the Tobacco Industry and Marketing Board statistics, farmers have sold 324 7534 kilogrammes of tobacco worth US$854 594 through the auction floors while 2,3 million kilogrammes worth US$ 6,2 million was sold through the contract floors. 

Last year during the same period, farmers had sold 3,7 million kilogrammes of tobacco worth US$8,9 million. 

This season prices are expected to be firm due to reduced volumes. The highest price paid by buyers so far is US$6, 50 per kilogramme. The price was suffered at the contract floors while the highest at the auction floors is US$4, 99 per kg. 

This season, tobacco farmers will be paid three quarters of their sales proceeds in foreign currency and the remaining quarter in local currency, converted at the prevailing auction exchange rate on the day of sale. 

The 75 percent will be paid directly into the growers’ foreign currency accounts and this is treated as free funds while the 25 percent local currency will be deposited into the growers’ local bank accounts or e-wallets. 

TIMB has licensed 3 auction floors for the 2022 marketing season, and these are; Tobacco Sales Floor (TSF), Boka Tobacco Floors (BTF), and Premier Tobacco Auction Floor (PTAF). 

The board also licensed 35 “A” Class buyers and 33 contracting companies. 

Decentralised contract sales were licensed at five designated centres, which are Karoi, Mvurwi, Bindura, Marondera and Rusape. 

TIMB vice chairperson Mrs Nomusa Dube said concerns had been raised with regards to growers facing viability challenges because of increased cost of production. 

“Prices of inputs really gone up. To alleviate some of these challenges, authorities are working on better alternative sources of funding to improve viability of tobacco growers. 

“The industry together with the Reserve Bank of Zimbabwe have jointly put in place improved payment measures to ensure that tobacco growers get full value for their crop and are simultaneously paid within the shortest possible time. 

“Through the Tobacco Value Chain Transformation Plan, spearheaded by our parent ministry and approved by Cabinet we are focusing on addressing issues of local funding, sustainable tobacco production, the regulatory framework as well as value addition and beneficiation,” she said. 

Lands, Agriculture, Fisheries, Water and Rural Development Minister Anxious Masuka expressed concern over some malpractices by contractors. 

“I know we have to do more to ensure transparency in our contracting, adhering to agreed terms, and executing obligations and responsibilities timeously. 

“Frustration has been reported with some contractors giving farmers inadequate input packs and very late yet they will eventually want the whole crop. This may lead to undesirable side-marketing. I have previously suggested that in addition to a minimum support package by contractors. Contractors should be obligated to provide transport to ferry the crop,” he said. 

Tobacco was this season affected by a late and false start of the rains, followed by incessant and excessive rains in January causing water logging, nutrient leaching, and disrupting weeding and other agronomic operations. 

Although a higher irrigated crop was grown, planting of the late dry-land crop had to be extended into January. 

This adversely affected yield and expected total production.

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