Zim auctions $1,1m tobacco

via Zim auctions $1,1m tobacco – DailyNews Live by John Kachembere  23 FEBRUARY 2014

Zimbabwe has auctioned tobacco worth $1,1 million since the opening of the 2014 selling season last Wednesday.

Around 517 762kg of the golden leaf went under the hammer at three licensed auctioneers on the opening day.

Figures released by the Tobacco Industry and Marketing Board (Timb) on Friday indicated that farmers who sold 194 301kg at Tobacco Sales Floor (TSF) received $468 015 while others who sold their crop at Boka Tobacco Floors (Boka) and Premier Tobacco Floors (PTF) received $308 030 and $ 397 994 respectively.

A total of 8 119 bales were laid the initial day compared to 3 047 last year while 7 411 bales were sold and only 708 were rejected for various reasons.

The 2013 tobacco marketing season generated $612 million from the sale of 166 million kg against a target of 170 million kg.

Zimbabwe is expected to increase production to 185 million kg this year, considering that the 97 000 hectares under crop represents 25 percent increase on prior year.

Industry experts say the sharp increase in tobacco hectarage can be attributed to the straightforward marketing systems that have been developed for tobacco and good returns compared to other crops like maize.

More than 88 000 farmers have registered to grow tobacco this year compared to 65 000 growers
last year.

Andrew Matibiri, Timb’s chief executive, said he expects the country to surpass the 185 million kg target based on the increase of tobacco farmers this season.

“To date we have more than 88 000 growers who have registered with us compared to about 65 444 who had done so at the same time last year.

This obviously indicates that we will have more tobacco this year,” he said.

Tobacco is Zimbabwe’s single largest foreign currency earner and has become lucrative after the country abandoned its currency after it had been ravaged by inflation in favour of a basket of currencies such as the United States dollar and South African rand four years ago.

On the eve of the season opening, investment firm Tetrad noted that more could be done to help small-scale farmers, who are the majority growers, access funding and increase output.

“Funding is necessary so that farmers prepare in time and purchase the required chemicals during the whole process. The reason why this is now critical is that there isn’t much scope or benefits to be realised from increasing hectarage but rather enhancing the quality of the leaf,” said Tetrad in its weekly report.

The investment firm noted that enhancing the quality of the leaf will result in more proceeds being realised.

“As can be seen, hectarage only increased by two percent despite registered farmers increasing by 29 percent. Thus there is need for funding to be provided so that more resources will be channelled within the land under hectarage.

“This also means that the issue of 99-year leases needs to be solved so that farmers access funding from banking institutions,” said Tetrad.