Golden leaf rakes in US$1.5m


Tobacco farmers have so far grossed more than US$1.5m after delivering
694,496kg, during the first three days of the selling season ending

The marketing season opened last Wednesday and the sector projects
an output of 240m kg, down from the 258 million kg realised last year.
The earnings are 588% higher than last year’s value of US$232,008
after selling 160,080 kg during the same period.

Tobacco Industry and Marketing Board (TIMB) chief executive
Andrew Matibiri told Business Times that the payment criterion has been
key to this year’s current success.

“So far this year we are over US$1m better of last year’s earnings
thanks to concerted efforts from Reserve Bank of Zimbabwe (RBZ),
TIMB and farmers which eased the payment system,” Matibiri said.
“The prices started on a high note with an average price at US$2.30/ kg
against US$1.45/kg in 2019.”

The first bale was sold at US$4/kg.

According to TIMB latest bulletin, contract farmers earned US$1.533m
after delivering 657,160kg while auction floors’ earnings amounted
to US$ 64, 861 after delivering 37,336kg.

TSF has sold 21, 589 kg worth US$38,832 while Premier Tobacco
Floor sold 9, 507 kg for US$15,961 and Boka sold 6,240kg for US$10,

In 2019, RBZ proposed 20% of offshore loans for the production of
the crop and 10% for value addition while the investor gets 70%.
The season kicked off at a time when the tobacco farmers rejected
the 50% forex retention offered by Reserve Bank of Zimbabwe as they
want 100% of the sales proceeds.

This could have some negative repercussions to the country’s
tobacco industry and economy as farmers feel the local payment
system could wipe their earnings due to galloping inflation.

Tobacco is the country’s second earner of foreign currency after gold
at 19% of the total export receipts and improves liquidity in the
economy and its operation is critical to the country.

Last year, tobacco exports tumbled 7% to US$846.7m from
US$907.8m due to unfavourable tobacco selling regimes.

China spends over US$350m on Zimbabwe’s tobacco.

During this time of the year the monetary authorities suspended all
borrowings from Afreximbank as the golden leaf will oil the dry market
from February to August.

TIMB has laid down guidelines on 2020 sales procedures to avert the
threat of the Covid-19 virus.

The TIMB has enlisted all relevant authorities, which include the
Zimbabwe Republic Police and local government authorities, to enforce
the complete closure and removal of all flea markets and all vendors
around the perimeter of the auction floor and contract sales during the
2020 tobacco marketing season.

He said this year’s selling season has a lot of promises as the farmers’
payment methods were simplified and clarified by both TIMB and
Reserve Bank of Zimbabwe (RBZ).

International buyers have already mobilised a great deal of forex to buy
local tobacco but he is not at liberty to discuss the exact amount.
On average international and local buyers mobilise an average
of US$800m yearly to buy local tobacco.

Buoyed by last year’s success of over 258 million kilogrammes of the
tobacco output, latest statistics say 81,977 hectares of tobacco had been
planted compared to 79,708 hectares for the same period last season.

According to TIMB bulletin tobacco registrations have fallen
15% to 143,568 in 2020 season from 168,735 the previous year
while new growers fell 82% to 7,447 from 40,772.

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