Tobacco deliveries decline
Sunday, 10 July 2011 12:58
BY KUDZAI CHIMHANGWA
TOBACCO deliveries at the country’s three auction floors have substantially
declined as most small-scale farmers have sold their crop amid fears that
the 170 million target set at the beginning of the selling season may not be
achieved.
The slow deliveries have also raised concern that this year’s selling season
could be the shortest and the Tobacco Industry and Marketing Board (Timb)
won’t be extending the auctions.
A visit to the country’s three main auction floors showed minimal activity
as only a few farmers could be seen delivering their crop.
On Thursday 142 461 kg went under the hammer compared to 255 192 kg last
year.
Of the tobacco sold on Thursday, 71 735 kg were sold at Tobacco Sales Floor
(TSF) at an average price of US$2,96; 22 160 kg at Millennium Tobacco Floors
at an average price of US$3,02 while 48 566 kg were sold at an average price
of US$3,17 at Boka Tobacco Floors.
Tobacco experts say most farmers had delivered the crop to the auction
floors early anticipating high prices, as offered last year.
A graphic analysis by the Zimbabwe Tobacco Association shows that last year,
the auction season commenced with average prices pegged at US$2,50 on day
one before shooting to US$3,61 per kg by day six.
However, this year tobacco prices slumped from US$2,50 on day one to US$2,30
by day four as small-scale farmers besieged the floors in anticipation of
favourable prices that had been obtaining at the start of the selling season
in 2010.
Similarly, on day 55 of this year, a peak of 1,1million kg had been
delivered at the floors while only 328 000 kg had been sold during the same
day last year, a factor which industry players have attributed to the
increase in the number of auction floors this year.
Timb chief executive officer, Andrew Matibiri told Standardbusiness that the
170 million kg mark would be achieved as this was based on estimates.
“The season is still ongoing and there is tobacco at the farms. It is not an
issue of optimism but this is all based on available estimates,” said
Matibiri, adding that it was too early to anticipate when the selling season
would come to an end.
A few commercial farmers have been delivering tobacco at Boka Tobacco Floors
and TSF as most small-scale farmers have returned to the farms to replant
the crop for next season.
Meanwhile, Boka Tobacco Floors is in talks with Timb to facilitate the
auctioning of burley tobacco. Between 700 and 1 000 tonnes of burley tobacco
are expected to be auctioned this year.
Although growing burley tobacco carries less overheads, the crop is not
preferred by most small-scale farmers as prices are not as favourable as
those offered for flue-cured tobacco.