Tobacco seed sales have plummeted 55,2% as farmers grapple with viability challenges ahead of the 2019/2020 season.
As of July 22, 2019 only 320 kilogrammes had been bought by farmers against 715 kilogrammes purchased during same period last year.

BY FIDELITY MHLANGA

“Poor prices (at the auction floors) are said to have affected the preparation of seedbeds for the coming crop.

These seedbeds should have been planted in June, but many growers were not in a good enough financial position to start the process. So, more bad news might be on the way We sincerely hope seed sales and farmers crop preparations improve in the next month,” Zimbabwe Tobacco Association chief executive Rodney Ambrose said.

Tobacco seeds, which were selling at US$25 per 100 grammes last year before the multi-currency system was scrapped, are now at ZW$170.

An official from Tobacco Research Board said the $170 factors in costs of producing tobacco varieties as it is in line with the interbank rate.

While farmers were entitled to 50% retention of foreign currency this season via their nostro accounts, the process of withdrawing the hard currency was poorly communicated to them and as a result they resorted to the less valued local currency.

The 50% tobacco retention is an important income in making tobacco farming viable and re-tooling for the next season.

Economic commentator John Robertson said the fact that the during the peak selling period there was a huge disparity that existed between the interbank rate and the parallel market rate affected the capacity of many farmers to retool.

“Seed sales for the 2019/20 season remain depressed as growers struggle to retool due to exchange rate variances between average selling rates of five against re-tooling rates at 9-11. Restrictions on the use of nostro funds are also a concern,” Robertson said.

Poor prices have also posed serious viability challenges for the over 200 000 farmers who grew the crop this season.

Tobacco selling, which commenced in March, is heading towards the end with deliveries now at one million kilogrammes per day from 10 million at the peak of the season in June.

The tobacco crop is a top forex earner and plays a key role in funding the importation of key commodities into the country.

While the season was affected by poor weather, at least 235 million kilogrammes has been delivered so far surpassing the target of 220 million kilogrammes.

However, it is well below last year’s output of 253 million kilogrammes, which earned the country about
US$1 billion.