Tobacco merchants pay forward US$350m


Tobacco merchants have made a commitment of US$350m, raised for  buying the first batch of tobacco when the marketing season kicks off on April 7, Business Times has learnt.

The buyers have mobilised between US$500m and US$600m to buy this year’s tobacco.

Presenting oral evidence to the Lands and Agricultural parliament portfolio committee chaired by Mayor Wadyajena, Tobacco Industry and Marketing Board (TIMB) chief executive Andrew Matibiri said everything was in place to start the season.

“The merchants have so far brought in US$350m for the purchasing of this country’s tobacco. The amount is a sign of commitment to show that they are ready to buy our tobacco, the other money will be released as the tobacco selling season progresses,” Matibiri said.

“The money was paid through the Reserve Bank of Zimbabwe’s division of Exchange Control and will be released to various banks when the season kicks off.”

Wadyajena asked the TIMB board to show them the proof of payment and he was referred to the Reserve Bank of Zimbabwe.

As a result, Wadyajena adjourned the portfolio committee meeting.

RBZ governor John Mangudya confirmed the proof of payment and did not want to dwell on the subject.

“Yes, the money was paid but the rest will come through as the tobacco selling season progresses,” Mangudya told Business Times.

Meanwhile, TIMB has moved to eliminate bogus players by putting in place strict regulations that merchants must abide by before they are registered in an effort to curb corruption at the floors.

Tobacco merchants were asked to submit copies of legally binding contracts by September 30 of every year and proof of inputs distributed either paid up invoices or payment plans with suppliers.

Contracted companies were asked to send TIMB a complete schedule of inputs and their costs by June 30 of every year.

According to TIMB, most merchants had met the requirements.

In the letter addressed to farmers by the Reserve Bank of Zimbabwe, the tobacco growers will get 60% of their earnings in foreign currency while the remaining 40% will be paid in local currency using the auction rate of the day.

However, farmers had applied for 80% foreign currency retention.

Tobacco growers objected that some suppliers of equipment and other needs tend to price at the black market rate, which is still running a modest, although much smaller premium.

The country’s three auction floors, Premier, Tobacco Sales and Boka have begun the 2021 tobacco marketing preparations.

28 “A” class buyers and more than 30 contractors are licensed to participate in this year’s tobacco selling season.

Of the 144,462 registered, 76% (110 047) are contracted tobacco farmers.

According to TIMB, the total hectarage planted has gone up to over 125,000 hectares from 107 558 last year.

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