15 February 2013

Zimbabwe: Improve Leaf Quality - Tobacco Farmers Urged

Tobacco Farmers have been urged to improve leaf quality in order to attract lucrative sale prices.

At the official opening of this year's tobacco's marketing season on Wednesday, Tobacco Industry Marketing Board (TIMB) chairperson Monica Chinamasa said growers should engage the expertise of agricultural extension services and farmers' unions to improve their tobacco agronomy.

"The previous season witnessed consistency in pricing and I call upon buyers to maintain that consistency throughout the season. We look forward to fair prices being paid for good quality tobacco. Higher prices are the only way to ensure that our growers become viable. As you are aware, tobacco production is under threat of being unviable due to increasing costs of production," Chinamasa noted.

She said farmers should aim to produce tobacco that competes on international markets by investing in efficient curing, grading, presentation facilities as well as skills in order to avoid compromising the price offered and the buyers' final export product.

However, at Boka Auction Floors, the tobacco marketing season got off to a promising start, with 700 bales delivered for sale.

The bales had an average weight of 70kg each. The highest price paid was US$4,70 with the lowest pegged at US$1,35 per kg.

At TSL the story was betterwith a total of 1700 bales averaging 75 kg each being sold. The top price recorded was US$4,70 per kg.

However, managing director of Tobacco Sales Floors, James Mutambanesango would not disclose the lowest bid price for the day.

TIMB's Chinamasa earlier said buyers should this season correct two worrisome pricing issues prevalent during the 2012 selling season.

These were the emergence of a maximum cap or ceiling for auction floor prices at US$4,99 per kg, which resulted in a number of tobacco grades of clearly different style and quality all fetching the same price.

There was also the uncomfortable difference between auction floor and contract prices for similar grades.

"All industry stakeholders are urged to develop new mechanisms to curb or eliminate side marketing as previously known firewalls have proven not effective in developing a spirit of 'giving unto Caesar what belongs to Caesar'," she said.

Zimbabwe Tobacco Association Chief Executive Officer Rodney Ambrose said farmers should improve tobacco quality through good handling.

"Prices will be determined by quality. A lot of tobacco needs improvement in handling and moisture control a failure may result in costly charges of rehandling and re-packaging to farmers" said Ambrose.

According to the TIMB, tobacco exports earned US$771 million in 2012, with sales averaging US$5,94 per kg, the highest annual average export price achieved since dollarisation. At least 144 million kg were sold realising about US$730 million at an average price of US$5,06 per kg.

Economic analysts say tobacco earnings are expected to rise significantly this year, with the country targeting to produce more than 170 million kg of the golden leaf.

Firm prices are anticipated as farmers are generally expected to have improved quality.

Together with improved crop, efficiency at the auction floors, should result in an overall good earnings season for the tobacco industry.

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