• Today Wed, 24 Apr 2024

Tobacco selling season kicks off

By Elita Chikwati
ALL is set for the 2011 tobacco selling season, which opens tomorrow with individual sales, raising hopes of fresh capital inflows into the country.
Contract sales are expected to begin on Thursday.
Tobacco is expected to lead the revival of the agricultural sector, which is expected to anchor economic growth this year along with the mining sector.
More than 170 million kilogrammes of the golden leaf is expected to be delivered to the country’s tobacco auction floors this year, which has the potential of raising US$387,6 million, going by the average price of US$2,28 per kilogramme for last year.
This would be an improvement from the 123 million kg worth US$347,8 million sold last year.
At least 60 percent of the crop is expected to be sold under contract with the remainder being sold under individual sales.
The Tobacco Industry and Marketing Board has registered a total of 21 Class A buyers, five of which are new companies.
By yesterday afternoon, a number of farmers had already started delivering their crop to the Tobacco Sales Floor in readiness for the opening of the season.
Officials at the floors that spoke on condition of anonymity said that they expected more deliveries today.
“Going by what transpired last year there is a belief that prices will be firm during the initial stages so we expect a rush to sell during the coming days and weeks if the prices do firm,” said the official.
Class B buyers will, however, not play a part this season after TIMB suspended them pending further consultations on their status.
The B Class buyers were suspended after they were accused of lowering prices of the tobacco crop at the auction floors and fleecing the indigenous growers last season.
The buyers were introduced to buy tobacco from farmers rejected by Class A merchants, rehandle and package it before reselling the crop to the Class A buyers.
Farmers, however, alleged that the Class B merchants were colluding with Class A merchants to reject the bulk of their tobacco so that they could buy it at low prices and resell it to Class A buyers at a higher price.
Tobacco Sales Floor and Boka Investments would be operating the floors this season.
Boka Investments is making a return to the tobacco industry after it was licensed by the TIMB ahead of the Zimbabwe Industry Tobacco Auction Centre that had been operating its Boka tobacco auction floors for the past nine years.
According to TIMB chairman Mr Njodzi Machirori, the selling of the golden leaf at Boka tobacco auction floors will start as soon as renovations that are currently being undertaken by Boka Investments are complete.
A total of 60 000 growers registered with the TIMB this year compared to 52 000 farmers last year.
Of these, 31 085 growers have registered to sell the crop this season, which translates to 60 percent of those on the TIMB register.
The TIMB decided to open the season early again this year following the success of their experimental programme last year when the season also opened in February.
Mr Machirori said that the decision to open the season early for the second consecutive year was taken due to encouraging feedback from stakeholders in the industry.
“We also want to align our season with the Brazilian season so that whatever will be happening in that market will also apply to our market,” he said.
Brazil is the world’s largest producer of tobacco and prices set in that market usually apply across the globe.
The current season is expected to be better than the last season in most respects after the TIMB ironed out some of the issues that caused problems during last season.
These include the availability of packaging material and prices on the auction floors.
On the provision of packaging material, the TIMB has since responded by appointing five more companies to provide hessian bags in addition to Propak that was the sole distributor of the bags.
To date, 835 000 hessian bags have been made available against an expected demand of about a million.
The bringing in of new players is expected to increase competition in the provision of the hessian bags leading to reasonable prices being charged for the packaging material.
TIMB chief executive Dr Andrew Matibiri said that indications are that the shortfall will be met during the course of the season.
“We are reliably informed and have seen documents that indicate that additional hessian bags are being shipped from overseas markets,” he said.
On prices, Mr Machirori appealed to the buyers to offer reasonable prices to farmers as well as letting market forces determine the price of tobacco on the floors.
Tobacco farmers have had to contend with several challenges this farming season that include adequate funding, adverse weather and power outages.
A number of tobacco growers failed to cure their crop properly due to constant power cuts while others resorted to using generators, which are not viable.
Before and during the season cropping inputs were generally available but unfortunately there was no funding available to most growers for working capital.
Besides some farmers lost their crop to hailstorm with the heavy rains also affecting the ripening process.
Despite the challenges, Mr Machirori said indications are that the condition of this year’s crop will be almost the same as last year’s or even better.

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