Tobacco sales rake in US$47,4 million

A total of 15,67 kilogrammes of tobacco valued at US$47,4 million have been sold since the marketing season started on March 30, 2022, latest official statistics from the industry regulator show.

Free-funded tobacco auction sales opened on March 30 2022, while contract floors tarted a day later with an opening price of US$4,20 per bale and US$6.50 per bale respectively.

The latest Tobacco Industry Marketing Board (TIMB) statistics show that at auction floors, prices are slightly higher compared to last year.

At the contract floors the highest tobacco price was at US$6,50 per kg, slightly above the 2020/21 price of US$6,30 per kg.

Free-funded auction floors ceiling price was US$4,99/kg, a slight increase from the beginning of sales when it was at US$4,96/kg.

The average price for both auction floors was US$2,77/kg, significantly better than last year’s average price of US$2,51/kg.

According to the Tobacco Industry Marketing Board (TIMB) statistics, the volume sold in the 10 day period is 32,21 percent lower at 15,67 million kgs compared to 17,09 million kgs.

In the 2021 marketing season, the country sold 211 kgs of which 133 million kgs was produced by small scale farmers.

However, under the Tobacco Value Chain Transformation Plan, the Government set a target of producing 300 million kilogrammes of tobacco by 2025 and the US$60 million fund it has set up is among the various initiatives aimed at driving the agenda.

The fund has potential to support 50 000 hectares of tobacco crop with capacity to produce 60 million kgs of tobacco.

Shadreck Makombe, the president Zimbabwe Commercial Farmers Union (ZCFU), said since it was early into the marketing season, the prices varied depending on the quality of crop.

“But for a start, we can’t say the prices are bad, but we also expect the prices to firm, given the situation that the supply is not as high as previous years, hence price will depend on demand, especially of good leaf,” he said.

He added, “We continue to implore farmers to be vigilant hence they should continue to interact with respective markets and not be swayed by opportunists.

Zimbabwe Tobacco Association (ZTA) chief executive Rodney Ambrose said tobacco
volumes are expected to increase and the farmers are happy with the price.

“There has been a positive start. Tobacco output is lower than last year, but we expect the volume to increase,’ he said.

He said currently, the payment of farmers is through the 75 to 25 percent ratio and the permanent payments are coming through.

“On the USD portion there are arrangements between the contractors and the bank and at the moment there are no issues,” said Ambrose.

He said with strong demand for tobacco globally, the price of tobacco is expected to firm further through the element of availability.

The Government has announced several policies and incentives that are meant to build capacity in the selected crops and minerals, under its Vision 2030 agenda.-The Herald