16 April 2019

Zimbabwe: Tobacco Sales Increase, Variance Drops

Tobacco farmers have sold 12 million kilogrammes of the golden leaf worth US$21,2 million as the variance between current volumes and last year's deliveries continues to decline.

The current volumes are 62 percent lower than the 32 million kilogrammes of flue-cured tobacco worth US$91 million that had been sold by farmers during the same period last year.

Deliveries to the floors were low during the first days of the season as some farmers adopted a wait-and-see approach, while others who sold their crop were not happy with the low prices on offer.

During the first days of the 2019 marketing season, variance between this year's deliveries and last season was around 90 percent.

The interbank rate is currently at US$1: $3,15.

Latest statistics from the Tobacco Industry and Marketing Board indicate that deliveries are increasing as prices continue to firm.

The statistics show that the average price is at US$1,72 compared to last year's average price of US$2, 76 per kg.

The highest price offered so far since the opening of the floors is US$5,10 compared to last year's US$6,22 per kg.

TIMB corporate communications manager, Mr Isheunesu Moyo yesterday confirmed that deliveries were up at the auction floors.

"Tobacco deliveries have been increasing. We expect a further decline in the variance as we approach the Independence and Easter holidays and as prices continue to firm. Deliveries are also expected to increase as schools open.

"Farmers now have a better understanding and appreciation of the payment modalities hence are more confident to deliver their tobacco," he said.

There have been some improvements in the deliveries by farmers to the auction floors especially after Government scrapped the two percent charge on all transactions.

Tobacco production has been on the increase in the past years with Government coming up with programmes to promote value addition to increase foreign currency earnings through increased export.

The Second Republic's thrust is to develop an infrastructure that supports a thriving and open economy which is capable of creating new opportunities for investors and more employment.

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