13 February 2013

Zimbabwe: Tobacco Auctions Start

The 2013 tobacco selling season starts today. At least 170 million kilogrammes of the golden leaf are expected to go under the hammer this season. Youth Development, Indigenisation and Empowerment Minister Saviour Kasukuwere is expected to officially open the sales at the Boka Tobacco Auction Floors this morning.

As usual, all the crop will be sold in Harare except for the Mashonaland Tobacco Company which may buy directly from its contracted growers at the farms.

A number of companies had over the years indicated their interest in decentralising the auction system, but they have failed to meet the licensing requirements.

However, the Tobacco Industry and Marketing Board has successfully decentralised its offices for bookings and registration.

Tobacco growers can register or make bookings in Mvurwi, Nyazura, Rusape and Chinhoyi.

This season farmers are expecting prices higher than those offered last year.

The highest price offered then remained static at US$4,99 per kg and this did not go down well with farmers who accused buyers of forming a cartel. Farmer organisations are appealing to TIMB to engage the buyers and ensure that there are no price cartels this year.

Three auction floors will be operating this year after the fourth one, Millennium Tobacco Auction Floor, failed to meet the TIMB requirements.

Tobacco Sales Floor, Boka Tobacco and Premier Tobacco Auction Floors were the three issued with licences.

TIMB also licensed 17 buyers compared to 14 buyers licensed last year.

This season tobacco auction floors have the capacity to sell 33 000 bales per day and the TIMB has already indicated that the whole crop produced this year could be sold in 50 days if farmers book early and all things are in order.

This will be the fourth time that the tobacco season opens in February. The TIMB had to shift the opening from April to February as farmers were in need of cash to finance other farming operations.

TIMB chairperson Mrs Monica Chinamasa indicated that this season would be a success considering the efforts that had been made by auction floor operators in preparation for the season.

As was the case last season, all three auction floors have clinics manned by professionals, canteens, accommodation and ablution facilities, police posts and several banks to pay farmers.

Mrs Chinamasa advised auction floor operators to prepare for peak periods during the season.

"We do not expect congestion at the floors, but there are peak periods where deliveries may be overwhelming and auction floors should be prepared for that," she said.

The peak period is expected towards the Easter holiday as farmers would want to sell their crop and get cash for the holidays.

Tobacco production has been on the increase thanks to the land reform programme which saw many small-scale farmers venturing into the once elite sector.

More than 66 100 farmers are registered as tobacco growers compared to the 34 970 last year.

About 80 percent of these growers are from the A1 and communal sectors.

Zimbabwe is slowly regaining its status as one of the major tobacco producers in the world.

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