$616m expected as tobacco selling season opens

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THE 2014 tobacco marketing season opens on Wednesday with earnings expected to top the $616 million achieved in the prior year on higher output, providing relief to an economy starved of liquidity.
Output is seen between 175 million kilogrammes and 185 million kg after 91, 000 farmers – mostly small-scale growers – registered to grow the crop for the current season compared to the 65, 500 from the previous season. Last year, the yield was 167 million kg which sold at an average $3.69 percent per kg.
Tobacco is Zimbabwe’s single largest foreign currency earner and has become lucrative after Zimbabwe abandoned its worthless currency in favour of a basket of currencies such as the United States dollar and South African rand four years ago.
On the eve of the season opening, Tetrad noted that more could be done to help small-scale farmers, who are the majority growers, access funding and increase output.
“Funding is necessary so that farmers prepare in time and purchase the required chemicals during the whole process. The reason why this is now critical is that there isn’t much scope or benefits to be realised from increasing hectarage but rather enhancing the quality of the leaf,” it said in a weekly report released on Tuesday.
“Enhancing the quality of the leaf will result in more proceeds being realised. As can be seen, hectarage only increased by two percent despite registered farmers increasing by 29 percent.
“Thus there is need for funding to be provided so that more resources will be channelled within the land under hectarage.
“This also means that the issue of 99-year leases needs to be solved so that farmers access funding from banking institutions.”
Zimbabwe has three auction floors Tobacco Sales Floor, Boka Tobacco Auction Floors and Premier Tobacco Auction Floors. Mashonaland Tobacco Company, the local unit of the United States-based Alliance One International, which has floors in Harare, Rusape, Mvurwi and Karoi will handle crop from its contracted farmers.Advertisement