Buyers mobilise US$900m for tobacco

25 Mar, 2018 - 00:03 0 Views
Buyers mobilise US$900m for tobacco Tobacco pushes up exports

The Sunday Mail

Livingstone Marufu
International tobacco buyers are expected to mobilise between US$800 to US$900 million to buy the crop this year, a move expected to boost foreign currency inflows into the country, The Sunday Mail Business has learnt.

The tobacco marketing season opened this Wednesday with 118 000 farmers expected to earn windfalls from their golden leaf. During the opening ceremony, Vice-President Constantino Chiwenga, told the gathering that the country would expand Command Agriculture to tobacco in recognition of its contribution to the country’s economy.

Tobacco Industry and Marketing Board TIMB chief executive, Dr Andrew Matibiri said: “International buyers have mobilised a total of between US$800 and US$900 million worth of foreign currency, which is an improvement from US$600 million mobilised last year. This money is expected to improve foreign currency inflows.

“In terms of the money, disbursement to the farmers depends with each bank. Some banks have more cash than others and banks will announce the limit on the day of opening of the auction floors.”

TIMB public relations manager Isheunesu Moyo, told The Sunday Mail Business that all the three auction floors have begun the 2018 tobacco marketing operations.

“We have opened the season on a high note, with highest price reaching US$4,99 per kilogramme on the first day compared to US$4,60 and the lowest price opened at US$1,35 per kg compared to US$0,90.

“These are positives for both buyers and farmers as numbers continue to be satisfactory.

“This year, we are going to use e-marketing system, which will dictate the amount of investment put in the crop, which will automatically determine the price of the crop.

“This will help to get rid of corruption in the auction floors as the electronic system determine the right prices not the bidders. But e-marketing will be used when we have fewer tobacco bales during the opening days and the closing days.

“Bidding will always be there but will be used during the peak of the auctions,” said Mr Moyo.

He said 29 “A” class buyers and 23 contractors will be buying crop in Zimbabwe this season. The country is targeting to get an output of around 200 million kilogrammes in the upcoming tobacco selling season, an increase from around 190 million kgs obtained last year.

Crop Assessment survey was conducted by Tobacco Industry and Marketing Board and Agricultural Technical and Extension Services (Agritex) in all tobacco-growing areas as from January 22 to February 2 2018.

From a total hectarage of 104 397, the country is expecting an average yield around 2 000kg/ha from all the sampled farms. Reaping and curing of the irrigated crop is at an advanced stage with more than 80 percent of the crop having been harvested. Most of the cured leaf is lemon to orange in colour and of fair to good quality.

The average yield from this planting is expected to be around 2 300kg/ha on the irrigated crop and the dry land crop average output per hectare is 1 700kg/ha.

Due to the poor distribution and late onset of rainfall, establishment of this crop was a big challenge to farmers resulting in re-planting hence the crop was uneven in some areas especially in A1 and communal farms. However, the coming in of rains in February had a major impact on tobacco output as the crop continued to change for the better.

Tobacco registrations have increased by 44 percent to 118 142 from 82 305. New growers increased by 125 percent to 33 605 from 14 952 this year. Over the past three to five years, tobacco has been the highest foreign currency earner for Zimbabwe.

Cumulatively, tobacco earned US$1,3 billion last year. It remains Zimbabwe’s biggest foreign currency earner followed by gold.

The Reserve Bank of Zimbabwe Governor Dr John Mangudya, said the opening of the auction floors earlier is expected to ease the cash shortages being experienced in the country.

“We’ve long queues because the tobacco season is closed. The opening of auction floors is expected to reduce the dry spell of foreign currency and ease cash shortages,” he said.

Dr Mangudya urged farmers to use plastic money instead of depending on cash transactions.

“Tobacco farmers are the biggest beneficiaries of the export incentive. We should look after the goose that lays the golden eggs,” said Dr Mangudya.

The Government recently awarded tobacco farmers an export incentive, which rewards the growers for generating foreign currency through exporting goods and services.

The incentive pays the farmer a bonus of up to 12 percent on the foreign currency generated. The incentive is paid in bond notes, which have the same value as the US dollar.

Share This: