US$10 million bills to support tobacco farmers

AGRICULTURAL Development Bank of Zimbabwe (Agribank) and FBC Bank Ltd on Wednesday floated Tobacco Bills worth US$10 million to support tobacco farmers for the 2010/11 season.

Agribank says the money raised will be channelled towards mobilising financial support for tobacco famers for the growing, curing and transportation of the crop to auction floors next year.
Neverseez Capital Ltd and FBC Bank are the financial advisors for the transactions.
In an interview with businessdigest on Wednesday, Neverseez Capital Ltd CEO Iyanda Nyanda said there was no closing date for the tobacco paper.
“We are operating at a first come first serve basis and we will close once the intended target has been achieved,” he said.
Neverseez Capital Ltd is also the financial advisor of the Agro-bills which were floated this year.
Nyanda said they were expecting a positive response as tobacco had become the best paying crop whose production had increased significantly this year.
“There are no prescribed assets on the market at the moment for both insurance and pension funds. We have created an opportunity for them to enhance and strengthen their positions before the year ends with this exercise,” Nyanda said.
In a statement on Wednesday Agribanks said: “The referred institutions hereby invites investors, including, but not limited to pension and provident funds, insurance companies, life mutual commercial banks and other interested institutions as well as individuals in Zimbabwe, to subscribe to bills amounting to US$10 million.”
The bills will be governed by and construed in accordance with the laws of Zimbabwe. The interests for the bills are negotiated on private placement basis with a maturity period of 360 days from date of issue. Payments will be made to investors by the settlements agent by due date of maturity.
“Most of the tobacco farmers are small scale and indigenous who need support to produce more next year,” added Nyanda.
Tobacco Industry and Marketing Board CEO Andrew Matibiri told businessdigest that tobacco production in Zimbabwe would increase next year as seed sufficient to cover 110 000 hectares had been sold while about 15 000 farmers had so far registered to grow the crop.
“The number of registered farmers has increased by 80% from last year.  The pace at which tobacco seed was being bought showed that farmers were geared to increase production,” he said.
Matibiri said the deadline for registration of growers for marketing tobacco has been set for October 30.
Last season, 52 000 farmers registered to produce tobacco on 65 000 hectares.
At the close of the auction floors on September 3, more than 120 million kgs of tobacco had been sold with the contract system contributing the bulk of the deliveries.
The industry had projected an output of 77 million kg to go under the hammer but this was later revised twice, first to 93 million kgs and then to 114 million kgs.
This year tobacco sales kicked off in February, earlier than the traditional month of April, to enable farmers to access cash to pay up debts.

 

Paul Nyakazeya

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