Auction floors’ average price reaches US$3,66 to dwarf contract side file picture

Edgar Vhera Agriculture Specialist Writer 

AFTER both auction and contract tobacco floors recorded an average price of US$3, 09 per kilogramme on Day 1 of trading, the average auction price has now risen four percent higher than that at the contract floors.

Latest statistics availed by the Tobacco Industry and Marketing Board (TIMB) show that as at Day 21, the average price at auction floors was US$3, 66 per kilogramme while the contract floors were at US$3, 52.

Trading at both auction and contract floors started at the same average price on the first day but that has risen 18 and 14 percent respectively by Day 21. The price spread rose from US$0, 03 by Day 2 to the current US$0, 14.

This has renewed hope that more farmers will go into free tobacco production next season.

Zimbabwe Tobacco Growers Association (ZTGA) chairman Mr George Seremwe said their initiatives and efforts of pushing for the removal of the price cap of US$4, 99 per kilogramme at the auction floors had yielded better results.

“Next year we are hoping to see an increase in numbers producing the free crop for auction, as a result of the removal of the price cap. As the season progresses, we expect the average price to go even higher, thereby further incentivising free tobacco production,” he said.

An A1 farmer from Usaka Farm in Mvurwi, Mr Isaac Chitima who planted free tobacco on one hectare said he was going to increase the hectarage next season, thanks to the current good prices.

“The average price of US$3, 80 per kilogramme that I received today from the sale of five bales of primings is good and definitely next year I will expand hectarage,” he said.

Mr Chitima said he decided to use his own resources after feeling short-changed by his previous contractor who inflated input prices.

Another farmer who preferred anonymity said the urge to do free tobacco might be enhanced further if the same good quality crop sold on the auction received the same high prices they are getting at the contract floors.

Farmers have so far pocketed US$186 149 767 against last year’s US$148 596 675 marking a 25 percent increase. The increased earnings are a combination of a six percent increase in volumes from 49 469 112 to 52 700 142 kilogrammes and an 18 percent increase in price from US$3, 00 to US$3, 53 per kilogramme.

Farmers selling their tobacco at the auction floors have so far delivered 3 182 053 kilogrammes of tobacco worth US$ 11 651 579.

Those under contract have sold 49 518 089 kilogrammes valued at US$174 498 188.

Contract floors account for 94 percent of the tobacco volumes with the balance of six coming from auction.

Astute trainings on presentation of tobacco for marketing has led to a 30 percent decline in the number of bales rejected this year, compared to the same period last year.

The highest price at the auction floors remains at US$5, 05 per kilogramme, up from last season’s US$4, 99 while that for contract floors has remained static at US$6, 99 to mark a 25 percent surge from last year’s US$5, 60.

As the nation awaits the results of the second round of crop and livestock assessment, many stakeholders believe that this season’s total production will fall short of last year’s due to the influence of the El Nino drought.

Last season the country produced a record 296 135 214 kilogrammes of flue-cured tobacco worth US$896 982 582.

 

 

 

 

 

 

 

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