Source: Tobacco sales rake in US$172m – NewsDay Zimbabwe

AT least US$172 million has been realised from tobacco sales after 74,8 million kilogrammes were delivered at the country’s auction and contract floors since the beginning of the season, statistics from Tobacco Industry and Marketing Board have shown.

During the same period last year, 55,7 million kg valued at US$99,46 million were delivered at the tobacco floors.

This season has also registered an improved average price of US$2,30 per kg, up from US$1,78 per kg last year.

Moreso, the highest price offered at auction floors was stuck at US$4,99 whereas the greatest price at the contract floors was US$6,60 per kg.

George Seremwe, the Tobacco Association of Zimbabwe president expressed concern over the poor prices offered at the auction floors.

Farmers are disappointed by government’s snail’s pace to address the fixed exchange rate which is currently stagnant at US $1:$25, yet the same dollar on the parallel market is trading at US$1:80 real time gross settlement.

The Reserve Bank of Zimbabwe on June 8 announced it was shifting from the fixed exchange rate to a market-determined exchange rate but nothing has materialised as yet.

Growers are entitled to 50% of each sale in forex and the remainder in the inflation-ravaged local currency.
The country’s tobacco deliveries have hit an all-time high of 258 million tonnes, but growers are dispirited by poor prices that marred the season.

Prices were subdued as tobacco merchants were not happy with the Reserve Bank of Zimbabwe arrangement to allow tobacco farmers to pay 70% of the loan they sourced from merchants in United States dollars and settle the remainder in the inflation-prone local currency.

The total number of tobacco farmers is 160 224 which is 13% down from 184 446 who grew the crop last season.

Top three tobacco farming provinces are Mashonaland Central, Mashonaland West and Manicaland, respectively.

This year’s tobacco season commenced on April 29 after several deferments as authorities grappled with measures to contain the spread of the global COVID-19 pandemic.

Tobacco is one of the country’s top forex earners which has helped shore up proceeds needed for the importation of industrial raw materials, fuel and pharmaceuticals among others.