Published by the government of Zimbabwe
14 April 2004
Harare — TOBACCO contract sales which were expected to start last week have been postponed again to a date yet to be announced as contractors are yet to meet some of the stipulated conditions, the Tobacco Industry and Marketing Board has said.
Inaugural contract sales were expected to start a day after the auction floors opened on March 30 but there have been delays due to a few outstanding issues.
One of the major problems that have emerged has to do with the quantity of crop financed by specific contractors given the fact that some contractors only financed part of the crop.
The Government has said that contractors are only entitled to the crop they financed.
"Contract sales that were expected to start this (last) week were delayed to a date to be announced as contractors are still to fulfil some conditions required of them to be able to buy tobacco," said TIMB last week.
Contractors who, for the first time, financed some tobacco farmers this season, have assumed the role of both the auctioneer and the merchant.
While the crop under the contract system is still to be sold, there was increased activity at the country's three auction floors last week.
Comparative statistics have shown that the quality of the crop is significantly better than that of last year.
"The quality of tobacco on offer so far promises to be better than last year's.
"Favourable tobacco styles that our market is known to produce were evident," added TIMB.
A total of 800 000 kilograms of tobacco worth US$1,5 million had gone under the hammer by close of business on Wednesday, a figure that was 200 000 kg better than that delivered over the same period last year.
The average price was US$1,76 per kg.
Tobacco growers have maintained that the current blend rate, where 75 percent of their earnings is paid at the auction rate while 25 percent is paid at $824 to the US dollar, may push them out of production.
"Whilst prices in US$ terms for majority grades were slightly above those in a similar period in the previous season, growers were not happy with the prices as is evidenced by a high percentage of torn tickets for price consideration that constituted nine percent of the total offerings," said TIMB.
A grower may withdraw crop on the auction floor if the price offered in not attractive.
Most of the farmers said they were hopeful that the responsible authorities would look into the issue of the blend rate and compensate for their losses.
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