HomeBusiness DigestRBZ ups gold, cotton, tobacco support prices

RBZ ups gold, cotton, tobacco support prices

THE Reserve Bank of Zimbabwe (RBZ) has increased the gold, tobacco and cotton support prices with immediate effect.

The gold support price is up from $175 000 per gram to $230 000.

“The increase in the tobacco price is in order to further uplift the perfo

rmance of the sector,” Gideon Gono said in his monetary policy statement for the second quarter, which he presented yesterday.

The tobacco support price of $5 000 per kg was replaced by new exchange rate of $17 500 per US dollar.

The tobacco farmers will be paid $17 500 per US dollar for their tobacco deliveries on the auction floors.

The cotton growers’ support price was then increased from $3 500 per kg to $5 000 per kg.

Gono said the increase in the tobacco support price would simplify the administration process of supporting tobacco farmers.

He said the cotton growers’ support price was increased in order to reflect the continued importance of the cotton industry as well as the fact that growers do not directly interface with the export markets and do not directly benefit from the new foreign exchange rate, $1:US$17 500.

“It is important to note that this new dispensation does not apply in retrospect,” Gono said.

Gold sales during the first six months of 2005 realised a total of US$116,5 million compared to US$141,1 million during the same period last year.

During the same period in 2003, gold sales fetched US$80,1 million.

Gold is one of the country’s major contributors to the country’s foreign currency inflows.

Zimbabwe can only raise US$12,5 million on the foreign currency auction, which is way below the amount required for the country’s basic imports like food and electricity.

The amount recently increased from US$11 million. — Staff Writer.

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