Tobacco sales drop by 48%

THE volume of tobacco sold on the first day of the marketing season at the auction floor on Tuesday declined by 48% to 48 938 kilogrammes compared to the same period last year, latest statistics from the Tobacco Industry and Marketing Board have shown.

Last season, a total of 94 453 kgs of tobacco were sold.

Prices also dropped by 0,85% to US$2,56 per kg compared to the same period last season.

As such, the tobacco industry netted US$125 095 in total.

Zimbabwe produced 211 million kilograms of tobacco in 2021 and 212 million kilogrammes in 2022.

This year, the country projects to produce 300 million kilogrammes.

Officiating at the ceremony to mark the start of 2023 tobacco marketing season on Tuesday in Harare, Vice-President Constantino Chiwenga said tobacco farmers should aim to increase production as stipulated in the government’s tobacco value chain transformation plan.

“The plan also focuses on localising financing for the 150 000 debt-ridden small-scale producers. We can achieve this by injecting seed funds and attending to enablers thereof,” he said.

“Then the next thing we want to do is to ensure that there is more value addition and beneficiation. We export 98% of our tobacco in raw form, therefore, exporting jobs and value.”

Concerns have been raised about growers facing viability challenges as a result of the increased cost of production. Chiwenga said they have increased the retention threshold from 75% to 85% to bail out farmers.

This will see tobacco growers who sell the green leaf at the auction or contract floors getting 85% of their money in United States dollars and the remaining 15% in local currency.

TIMB chairperson Patrick Devenish said the industry and the Reserve Bank of Zimbabwe have jointly put in place improved payment measures to ensure that tobacco growers get full value for their crop.

To enforce this, he said they stand guided by the Contractors’ Compliance Administration Framework.

“All tobacco merchants and contractors have signed it and have been made aware that they are supposed to pay growers within 48 hours of sales completion. Failure to do so will be met by stiff penalties, suspension, or cancelation of operating licenses. Therefore, we encourage tobacco growers to notify TIMB if they are not paid within 48 hours,” Devenish said.

During the 2022/23 tobacco production season, there are 148 527 growers doing 117 928 hectares of tobacco as compared to 110 155 hectares of tobacco by 122 841 growers.

The board has licensed two auction floors and these are Tobacco Sales Floor and Premier Tobacco Auction Floor. The board also licensed 25 “A” Class buyers and 32 contracting companies.

Sales will be conducted in Harare as well as five decentralized centres which are Karoi, Mvurwi, Bindura, Marondera and Rusape.-newsday