Walter Muchinguri, Assistant Business Editor
AT least four of the 20 Class “A” buyers that have been licensed to buy tobacco this year risk losing their licences as they have not yet started operating, four weeks after the season begun. Tobacco Industry and Marketing Board chief executive Dr Andrew Matibiri said the four have two weeks to get their act together.
“We give our buyers at least six weeks, from the start of the selling season, to start operating before we withdraw their licences. We, however, make exceptions if the buyer or buyers have good reason,” he said.
However, the absence of all buyers at the floors has been singled out by stakeholders as the major reason for the slow start to the tobacco selling season which has been characterised by protests from farmers over low tobacco prices.
Stakeholders in the industry have been accusing the few buyers on the market of using their numbers to manipulate prices so that they could buy as much tobacco as possible before other buyers come on board.
This year’s seasonal average price is 29,7 percent lower than that of last year.
Last year’s seasonal average price was $3,87 per kilogramme against $2,72 per kg for this year. The first bale to go on sale this season was sold at US$4,85 per kilogramme which is slightly high than the US$4,50 offered last year.
Dr Matibiri, however, played down the impact of the absence of the four buyers saying that the traditional major tobacco buyers are already active.
“These are just small buyers whose contribution is not very significant. They are mostly foreign buyers who are still seeking regulatory approval to start operating,” he said.
The buyers on their part have been blaming the low prices of tobacco on the quality of tobacco that is being brought to the floor. They contend that most of the tobacco are primmings, lower leaves, while the good will be delivered later in the season as prices continue to improve. However, it has been argued that while large scale farmers have the luxury of bringing primmings, there are small-scale farmers who, because of their limited capacity, are bringing their best tobacco, which should fetch higher prices.
A total of 95 248 farmers have so far registered for these tobacco season and of these 46 000 are small-scale farmers.
At least 185 million kilogrammes of tobacco are expected to go under the hammer this season up from the 166,6 million kg sold last year.
Tobacco is one of the country’s top foreign currency earners and is expected to contribute the most to the 9 percent growth in agriculture this year.