The Sunday Mail
The Tobacco Industry and Marketing Board (TIMB) has partnered with the Zimbabwe Stock Exchange Limited (ZSE) and the Victoria Falls Stock Exchange Limited (VFEX), a development that will result in improved fund-raising for tobacco farmers and merchants.
The partnership could also see the development of a tobacco derivatives market.
A derivative is basically a contract between two or more parties whose value is based on an agreed-upon underlying financial asset.
In a joint statement on Friday, the three parties announced the signing of a Memorandum of Understanding (MOU) between them.
“Given the funding and marketing challenges faced by small scale tobacco farmers, funding challenges faced by local tobacco merchants and the limited hedging instruments for farmers in terms of price and weather risks, the Tobacco Industry and Marketing Board, the Zimbabwe Stock Exchange Limited, the Victoria Falls Stock Exchange Limited are pleased to announce the signing of a Memorandum of Understanding (MOU) which forms a basis for cooperation in the following areas; fundraising for tobacco farmers, fundraising for local tobacco merchants, the compilation and distribution of tobacco production and marketing data, the establishment of a tobacco derivatives market,” reads the statement.
According to the parties, the full implementation of the agreement is expected to result in increased productivity and smoother cash flows for small scale farmers and improved capacity for local tobacco merchants.