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Business Reporter
Virginia tobacco deliveries received under the auction and contract systems are on the verge of reaching the 200 million kilogrammes mark this year. This will be the second time since 2002 that tobacco production will have broken above the 200 million kilogrammes barrier. The highest production figure for the country currently stands at 236,6 million kilogrammes.

Tobacco production has been on a rebound after plunging to an all-time low of 46 million kilogrammes in 2006 before recovering to about 144 million kilogrammes in 2012, and 166,6 million kilogrammes last year.

According to the latest statistics released by the Tobacco Industry and Marketing Board 199,09 million kilogrammes worth $632,7 million have been delivered since the beginning of the season in February.

The tobacco delivered is 32,72 percent more than the 150 million kilogrammes that were delivered during the same period last year.
The 150 million kilogrammes fetched $554,2 million at an average price of $3,69 per kg, which was 13,97 percent higher than this year’s average of $3,18 per kg.

Most of the tobacco has been brought under the contract system, which is accounting for more than 60 percent of the delivered crop.
The auction system has so far handled 149,9 million kilogrammes worth $498,8 million while the auction system has received 49,1 million kilogrammes worth $133,8 million.

Contractors have been offering better prices this season with tobacco sold under contract fetching an average of $3,33 per kg while the same contractors, who are also buyers under the auction system have been offering $2,72 per kg to individual farmers.

This resulted in contracted and un-contracted farmers flooding the contract system with indications that more farmers would join the contract system to the detriment of the auction system, which is supposed to provide the necessary balance in the industry.

Although the 2014 marketing season officially closed last Friday after daily deliveries had significantly dropped particularly at auction floors, deliveries to contract floors have remained strong and will continue until further notice.

Stakeholders in the tobacco industry believe that the increase in production is a positive development for the industry and the country as a whole.
“This is a bold statement that we are sending out to the world that Zimbabwe is out to reclaim its position as one of the world’s leading tobacco producers.

“This has definitely been a successful season overall.
“We are almost there and with a little bit of support, we are definitely going to surpass our own record of 236,6 million kilogrammes come next year,” said one of the stakeholders.

The number of farmers joining the tobacco sector since the adoption of the multi-currency system in 2009 has been on the increase and to date, about 106 372 growers have registered for 2014 season compared to about 91 160, who had registered by the same period last year.
Tobacco is one of the country’s top foreign currency earners and accounts for 10,7 percent of the country’s Gross Domestic Product.