By Alois Vinga
ZIMBABWE Stock Exchange (ZSE) listed industrial holdings group, Tobacco Sales Limited (TSL) says earlier tobacco output for this year will be much lower than the earlier anticipated projections.
Last year, a total 258 million kgs were realised in the entire selling season and earlier projections at the back of a later start of planting season due to drought related issues had anticipated between 10 to 15 % reduction of the crop’s yields.
While officially, the selling season ended on Friday last week, a few contract sales are, however, still being conducted.
“Currently at 182 million kgs, indications are that the national crop will fall short of the original target. Prices, on average, have been firmer in the current year,” TSL Company Secretary, James Muchando said.
TSL’s trading update for the third quarter ended July 31 2020 states that independent auction volumes at Tobacco Sales Floor at 5.7 million kgs were 73% below prior year owing to the smaller tobacco crop.
However, the firm still holds the largest market share in this segment and has the highest seasonal average price.
Contracted volumes handled for tobacco merchants at 7.9 million kgs are 45% below the same period last year.
Volumes at Propak Hessian were down 21% due to the later start of the tobacco selling season and the decline in national tobacco crop. Procurement of hessian for the coming season is at an advanced stage, cognisant of likely disruptions in the supply chain.
“Work is being undertaken with industry players to ensure a smoother tobacco marketing season in 2021,” Muchando said.
In the logistics operations, tobacco handling volumes were 4% behind prior year due to the later start of the tobacco selling season and delays in tobacco processing.
The distribution division recorded significant growth in volumes as new customers were secured. Volumes in the ports business decreased by 37% due to generally slower movement of both imports and exports owing to the Covid-19 pandemic.
Handling volumes at Premier Forklifts were 18% below prior year due to the delayed start of tobacco processing.