Tobacco farmers reject low prices

Flue-cured tobacco sales have remained depressed at the auction floors, with the first day of the marketing season being hampered by farmers who withdrew 98 percent of the crop from the floors in protest over low prices offered by buyers.

According to statistics released by the Tobacco Industry and Marketing Board (TIMB) yesterday, growers sold 3 886 kilogrammes of tobacco worth US$7 100 on the first day.

During the same period last year, they sold 165 105 kilogrammes worth US$366 003.

The statistics also show that rejected bales on the first day had increased by 1 433 percent from the 5, 70 percent last year to 87,38 percent this season.

The highest price offered on the first day was $4, 50 per kilogramme, which is less than the $4, 99 per kilogramme offered during the same period last year.

Most farmers complained the prices were too low.

Others said they were suspending sales until prices were revised.

Some players said both farmers and merchants were still testing the market and expected the deliveries to increase as she season progresses.

There are fears that if the low prices continue, farmers will be forced to sell their crop to middlemen who collect from the farms and also pay cash.

On Wednesday, there were rumours that the RBZ was no longer paying farmers in foreign currency, but in 100 percent RTGS.

A number of farmers said they did not have FCA bank accounts, while others said not enough communication had been done by the relevant authorities to educate them on the new payment system.

The RBZ has since dismissed the allegations of the 100 percent RTGS payment.

It said farmers will be paid 50 percent of their net sale proceeds into their Nostro FCA bank accounts.

In a joint statement, the RBZ and TIMB said they will ensure tobacco growers had access to their entitlement of 50 percent of the net tobacco sale proceeds into their Nostro FCA bank accounts.

“In addition to accessing cash at a rate of RTGS $0,50 per kilogramme of tobacco sold and up to a maximum of RTGS $300, the small-scale tobacco growers (those with two hectares and below) are eligible for a US dollar cash withdrawal of US$0,10 per kilogramme of tobacco sold per sale, up to a maximum of US$50, after their Nostro FCA bank accounts have been credited with the foreign currency entitlement,” read the statement.

“The RBZ and TIMB have opened lines of communication with tobacco growers and merchants who are satisfied with progress on the payment modalities.”