Zimbabwe has raked in US$64.4 million from the sale of 28.2 million kilograms of tobacco in 16 days compared with last year, Zimbabwe media reported, citing statistics released by the Tobacco Industry and Marketing Board (TIMB).
According to a report in the state-run daily newspaper The Herald, an estimated 97% of the tobacco delivered came from the contract crop, with just 3% being sold on the auction floors. Buyers offered a highest price of US$6.60/kg at the contract floors, while the highest price at the auction floors remained at US$4.99/kg.
In the same period last year, tobacco generated US$18.6m from the sale of 10.5 million kilograms, about 37% of the deliveries so far this year.
At this stage, 382,149 bales have been laid and 369,862 sold as compared with 162,298 laid during the corresponding period last year, with 150,562 bales sold during the same period last year.
Most farmers are now producing tobacco under contract farming. Under this arrangement, farmers are guaranteed a timely supply of inputs and, in some cases, funds to pay workers. Farmers are given technical advice because the contractors want their crop grown according to market requirements.
The Zimbabwe Broadcasting Corporation (ZBC) reported that TIMB’s Covid-19 regulations, which demand decentralisation of tobacco auction floors for the current season, have been a blessing in disguise for farmers in Karoi, who said the move has cut unnecessary transport costs on their part.
The farmers have embraced the initiative, saying the establishment of sales floors in their area has been a game-changer.
Every year, tobacco farmers make long trips to Harare to deliver their produce but risk spending days at the auction floors as well as falling prey to thieves in the capital, reported ZBC. Now the TIMB is insisting on localised sales to avoid the spread of the coronavirus.
The broadcaster reported that only 15% of tobacco sales in 2019 were conducted outside Harare, but a huge increase was expected this year due to the decentralisation of tobacco sales.
Meanwhile, Malawian media reported that Zimbabwe’s newly licensed tobacco buyer, Voedsel Tobacco Company, was yet to start buying the leaf four weeks after the official opening of the 2020 marketing season.
Independent newspaper The Nation reported that Tobacco Commission (TC) CEO Kayisi Sadala confirmed last week that Voedsel had been delayed due to the lockdown in Zimbabwe, imposed on March 30, as a measure to contain the Covid-19 pandemic.
Sadala said the firm would be buying burley and flue-cured tobacco on the auction market in the first year, but would expand to contract marketing in the second year.
He said there was low competition among tobacco buyers, a situation which he said had contributed to the high rejection rate recorded at 64% at the Lilongwe floors on Tuesday last week, above the recommended 20%.
Tama Farmers Trust CEO Felix Thole said having more tobacco-buying companies on the market induces competition, which he said benefits tobacco growers.
Voedsel, a Zimbabwean wholly indigenous company established in 2008, was unveiled by the TC in March this year, bringing the number of tobacco buyers in the country to nine.