Tobacco selling season ready to roll

Source: Tobacco selling season ready to roll – DailyNews Live

BUSINESS WRITER      18 February 2017

HARARE – Zimbabwe’s tobacco auction floors will open next month, with
government hoping earnings from the crop will solve the country’s dollar

Tobacco is the country’s major foreign currency earner after it raked in
nearly $1 billion last year in export receipts ahead of platinum and gold.

The Tobacco Industry and Marketing Board (TIMB) spokesperson, Isheunesu
Moyo, told the businessdaily that this season’s dates had now been set,
with the contract sales floors opening doors in March.

“Yes, the floors open on the 15th next month … the contract ones open
the following day,” he said.

Reserve Bank of Zimbabwe (RBZ) governor John Mangudya said he anticipated
the crop to perform well this year so that the golden leaf could provide
the much needed foreign exchange.

“The opening up of the tobacco floors during the first quarter of 2017
will boost the country’s foreign exchange earnings and this is expected to
go a long way in ameliorating the liquidity challenges in the market,” he
said in his 2017 monetary policy statement on Wednesday.

As motivation to encourage farmers to grow tobacco, the RBZ paid out $26,6
million of the $29,3 million five percent export incentive scheme
introduced last year to tobacco farmers who delivered their crop in the
2016 marketing season.

In November last year, the apex bank disbursed $29,3 million as an export
incentive to tobacco farmers that submitted their banking details through

The five percent export incentive was being awarded to incentivise farmers
so they increase the crop’s output as well as promote financial inclusion,
as the country’s over-dependence on the crop’s earnings became more

During the 2016 tobacco marketing season, 65 829 growers who sold their
crop worth $586,9 million and had bank accounts, were eligible for the
five percent export incentive.

According to Mangudya, a balance of $2,7 million, representing 9,2
percent, has not yet been credited to the tobacco growers’ bank accounts.

However, market watchers have cautioned that government needs to have
conservative projections for this year’s crop, following heavy rains
feared to have affected the crop.

Zimbabwe depends on tobacco and earnings from its minerals for foreign
exchange as industry collapse driven by economic deterioration has
narrowed its export base.