Tobacco deliveries take a knock at auction floors

April 5, 2016 in Business

THE Tobacco Industry and Marketing Board (TIMB) recorded a decrease in tobacco deliveries in the first week of the tobacco selling season for this year compared to 2015.

BY TARISAI MANDIZHA

Figures provided by TIMB show that as of Friday, delivered tobacco represented a decline of 13,78% with 978 135 kg valued at $1,6 million, down 46% from 1,1 million kg valued at $ 2,9 million over the same period last year.

Tobacco was sold for an average price of $1,59 per kg down from $2,56 over the same period last year.

The total auction sales stood at 808 447 kgs valued at $1,2 million while contract sales were 167 688 kg at $356 995.

A total of 13 153 bales were sold, a figure lower than the 13 837 recorded during the same period last year while the total of rejected bales was up 27% at 1028 from 2 712 bales same time last year.

According to the TIMB report, the number of farmers registered as tobacco growers declined by 22% to 71 728 as compared to 92 430 on the same period last year.

While 9 129 were new growers, registering a 48% decline in the number of new tobacco growers as compared to 17397 new tobacco farmers registered in 2015.

The country is expected to record a 20% decline in tobacco output this year from 198 million kgs produced in 2015.

Tobacco farmers last week faced cash challenges as the TIMB system was failing to clear bank transactions on time.

Commenting on tobacco farmer’s cash crises at auction floors, TIMB public relations officer Isheanesu Moyo said the cash situation has since normalised and farmers are now able to withdraw their monies.

“There were a few cases where farmers failed to have their money reflecting the same day. The system was fine-tuned and this has become a thing of the past,” Moyo said.

He said what has been causing challenges was that some of the farmers had not registered and some had no required documentation to be able to open account and this was pausing challenges to the system, but this has since been resolved.

In the new system introduced by TIMB and the Reserve Bank of Zimbabwe (RBZ), farmers can now only receive payments for tobacco sold at auction floors through banks.

However, last Friday, farmers said they had not received their money, three days after the auction floors opened in Harare, raising questions on the efficacy of the new payment system.

In his 2016 National Budget presentation, Finance minister Patrick Chinamasa said agriculture was expected to recover by 1,8%, though adequate planning on mitigating the impact of the El Niño weather would be essential.

Chinamasa said the 2015/16 weather forecast predicted a challenging agricultural season, with erratic distribution of rains and this would have negative implications on the outcome of the forthcoming agricultural season.

“Our interventions in agriculture for the coming season take account of Metrological Services weather forecasts for the 2015/2016 farming season of normal to below normal rains, with the likelihood of a late start to the season, coupled with a short rainfall season over December to February/March 2016.” he said