Tobacco deliveries head for 100 million kg mark
Herald, Monday, July 12, 2010
By Walter Muchinguri
TOBACCO deliveries to the auction floors could this year reach the 100 million-kg mark for the first time in eight years.
During the past eight years deliveries plummeted from about 165,6 million kg in 2002 to as low as 35 million kg in 2008 before rising to 56 million last year. But as of Thursday last week the seasonal total was at 92
million kg, which is just one million kg shy of the new target set by the Tobacco Industry and Marketing Board last month.
The TIMB revised its target upwards by 17 percent from 77 million kg to 93 million and it seems likely that it would be forced to make another revision soon.
Tobacco deliveries are still continuing raising hope that the 100 million-kg mark is within reach.
Tobacco is one of the country’s top foreign currency earners contributing 26 percent to Gross Domestic Product last year.
According to the latest bulletin issued by TIMB, contractors have continued to dominate the market with weekly sales of over 4 million kg and the remaining 1,3 million kg going through auction floors.
The weekly average price rose from US$2,67 per kg for the week ending July 2 to US$2,73 per kg for last week while the seasonal average price continue to fall, losing 1 cent to trade at US$2,97 per kg as at July 8.
Throughput for the week continued to decline steadily ending the week on 5,3 million kg, just 0,4 million kg lower than the previous week.
To-date 92,2 million kg of tobacco have been sold at an average price of US$2,97/kg compared to 55,6 million kg that was sold at US$3.00/kg during the same period last year.
The 92,2 million-kg brought in US$273,8 million, which is higher than the US$167,3 million that was received from the sale of 55,6 million kg during the same period last year.
Of the 92,2 million kg, 55,4 million kg valued at US$172,4 million was sold under contract at an average price of US$3,11/kg and the balance of 36,8 million kg worth US$101,4 million went under the hammer through the auction system at an average price of US$2,75/kg.
Under the auction system Tobacco Sales Floor accounted for 18,9 million-kg valued at US$51,8 million which was sold at an average price of US$2,74/kg.
The balance of 17,8 million worth US$49,5 million was sold at Zitac at an average price of US$2,77 per kg.
The current marketing season had been affected by a number of challenges such as poor prices, shortages of wrapping paper, congestion and corruption by some employees at the auction floors.
These have however been dealt with.
Seasonal sales for burley increased to 230 397 kg from 200 145kg achieved during the week ending July 2.
The average price further declined to US$1,95/kg loosing 3 cents from the week ending July 2.
During a corresponding period in 2009, 109 475kg were sold at an average price of US$1,98/kg.