Tobacco output remains flat, prices seen depressed

Tobacco output remains flat, prices seen depressed

Source: Tobacco output remains flat, prices seen depressed | The Financial Gazette March 16, 2017

TOBACCO output for 2016/17 season is expected to remain flat at 202 million kgs, similar to the previous season despite an increase in growers of over 12 000 to 82 000 farmers, but prices are likely to be depressed, officials said.

The tobacco buying season opens on tomorrow with sales four auction floors, Premier Tobacco, Boka Tobacco, Tobacco Sales Floor and Premium Tobacco Zimbabwe. There are also several companies that have contracted farmers.

Tobacco Industry and Marketing Board (TIMB) chairperson Monica Chinamasa told journalists after touring auction floors that the above normal rainfall which continues to hit parts of the country has minimal effect on the overall output.

TIMB also introduced an e-marketing auction system to promote fast sales and to reduce corruption which it said was caused by the interaction between the farmers and the buyers.

“E-marketing which they (tobacco floors) have been practicing with farmers, is going very well. Farmers can monitor sales from their screens (phones) as sales will happen in real time…Buyers will be able to bid for the tobacco, which will enable the price to go up,” said Chinamasa.

TIMB spokesperson Isheunesu Moyo told The Source that prices are influenced by the quality of tobacco.

“Average price was US$2,95 for the last two seasons, highest on contract floors was going as high as US$6,35 and US$4,99 on auction and it is likely to be the same this season,” said Moyo.

Moyo added that the country was still exporting tobacco from the previous season. As of December, the country exported 164,5 million kgs of tobacco valued at US$933,6 million.

Tobacco is Zimbabwe’s second largest foreign currency earning commodity after gold. Moyo said about 99 percent of 2016/17crop will be exported to China, South Africa and Germany.