21 May 2012

Zimbabwe: Tobacco Prices Remain Firm

TOBACCO prices have continued to remain firm at the auction floors, hovering above US$3 per kilogramme despite a decline in deliveries in recent days. According to statistics released by the Tobacco Industry and Marketing Board last Friday, the season average price was US$3,76 per kg, which is 41 percent higher that the US$2,67 per kg that was recorded during the same period last year.

In terms of the auction floors, Tobacco Sales Floors has the highest seasonal average of US$3,71 per kg followed by Premier Tobacco Floors with an average of US$3,68 per kg, Millennium Tobacco Floors US$3,67 per kg and Boka Tobacco Floors US$3,59 per kg.

A total of 92,6 million kg of tobacco has been sold so far this season earning US$362,1 million.

Of the 92,6 million kg, 55,9 million kg, valued at US$214,4 million was sold through the auction system while the remainder of 40,3 million kg worth US$147,6 million was sold under individual sales.

TSF has sold the highest amount of tobacco under individual sales amounting to 13,4 million worth US$49,8 million followed by Boka Tobacco Floors with 12,4 million kg worth US$44,6 million. Premier Tobacco Floors was third selling 27,5 million kg valued at US$7,4 million and Millennium Tobacco Floors has sold the least amount of tobacco so far -- 6,9 million kg worth US$25,5 million.

In terms of Friday's sales TSF had the highest average price of US$3,71 per kg followed by Premier Tobacco Floors at US$3,68 per kg, Millennium Tobacco Floors at US$3,67 per kg and Boka Tobacco Floors at US$3,35 per kg.

A total of 150 million kg of tobacco is expected to be delivered to the auction follows during the current season, which opened in February.

Analysts believe that the current dip in deliveries is temporary with more tobacco expected to be delivered in the coming months.

"We saw an upsurge of deliveries just before schools opened and this was probably because farmers were rushing to sell their tobacco in order to raise money for school fees and other requirements. However, since schools have now re-opened farmers are no longer under pressure to sell and can therefore afford to take their time before coming to the floors," said one analyst.

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