Tobacco earns farmers US$135m

Tobacco prices have continued to firm with farmers earning US$135,5 million after selling 52 million kg through the auction and contract sales.

The Second Crop and Livestock Assessment Report has revealed that 200 million kg are expected from this season’s crop, registering an 8 percent increase from the 184 million kg that passed through the hammer last year.

According to the Tobacco Industry and Marketing Board (TIMB), tobacco earnings have increased by 95 percent from last year’s US$69,4 million generated from the sale of 30,90 million kg of tobacco.

There is a hive of activity at the contract floors where the bulk of the crop has been sold so far.

The auction floors have sold a paltry 3,6 million kg worth US$9,6 million compared to 48,4 million kg valued at US$125,8 sold through the contract floors.

The average price is US$2,60 per kg compared to US$2,24 offered during the same period last year.

Farmers planted 125 176 hectares of tobacco during the 2020/21 season, representing an increase from the 117 976 hectares planted last season.

TIMB chief executive, Mr Meanwell Gudu, recently said the selling season is progressing well, with prices firming compared to last year. “Payments are being processed on time and farmers are accepting both RTGS and foreign currency at the banks,” he said.

As was the case last year, sales are running under strict Covid-19 guidelines developed by the tobacco industry with guidance from the Agriculture and Health ministries.

TIMB has licensed 28 A class buyers and 39 contract buyers for this season.

The bulk of the crop is grown under contract with farmers delivering to their contractor, rather than the auction floors, but auction prices help to determine the final contract price.

Contract floors have been decentralised and farmers can sell their crop in Karoi, Mvurwi, Bindura, Marondera and Rusape.

This year’s crop was grown in wet weather conditions which, while giving potential for better quality, also saw some nutrient leaching and incidences of some bacterial diseases.

But the general quality has been commended by stakeholders.

Tobacco production has been on the increase with Government targeting to raise production to 300 million kg annually, through implementation of the Tobacco Value Chain Transformation Strategy.-herald.cl.zw