HomeBusiness DigestLow price, congestion fears for tobacco selling season

Low price, congestion fears for tobacco selling season

Leonard Makombe

LOW prices and congestion would characterise the start of the tobacco selling season if only one auction floor was to open its doors, farmers’ organisations have said.

This year’s season opens in about a fortnight and only the Tobacco Sales Floor  and Boka Tobacco Floor (BTF), which recently acquired a licence at the expense of the Zimbabwe Industry Tobacco Auction Centre (Zitac), are the only authorised auction floors this year.

When announcing the opening dates for the 2011 selling season, the Tobacco Industry and Marketing Board (TIMB), the authority that regulates the growing and selling of the crop, said BTF would only open when the floors are ready for business.

Wilfred Nhemwa of the Tobacco Association of Zimbabwe, an organisation representing new farmers, said prices could be low if only one auction floor was operational when the season starts on February 15.

“It will definitely affect us because there will be no competition between auction floors,” said Nhemwa.
President of the Zimbabwe Tobacco Association, Kevin Cooke said there was likely to be congestion should only TSF be open when the season starts.

“There is likely to be serious congestion if all the non-contract farmers were to deliver their crop at TSF,” said Cooke. “In meetings we have held, the other auction floor is likely to open a month after the start of the season.”

Cooke said while there was potential to produce between 150 million and 180 million kgs of tobacco, the continued wet weather could heavily dent the yield.

“It is estimated that we lose up to 1 million kg each day in this wet weather,” said Cooke. “We anticipate a wet February which could further dent the prospect.”

Nhemwa said farmers were affected by the intermittent power supply which affected curing.

“This is the most critical phase in the crop production but we are affected by power cuts,” said Nhemwa. “We have talked to Zesa who told us that tobacco farmers owe US$50 million in unpaid bills and they asked us to urge farmers to settle half of this amount to have uninterrupted electricity supply.”

Nhemwa said they wanted to save the quality of the crop and uninterrupted power supply was one of the ways to have a good crop when the season opens next month.

Cooke said power cuts increased operating costs as farmers were using as much as 1 000 litres of diesel a day to power generators used for tobacco curing.

“The Zimbabwe Electricity Transmission and Distribution Company told us that only two out of six generators were working thus there is limited power,” said Cooke. “They told us that they were unable to buy spare parts because people were not paying bills and we are in a vicious cycle.”

The tobacco industry responded quickly to the fiscal changes, especially the change over to multiple currencies and grew from around 50 million kg in 2008 to 70 million a year after.

Last year 123 million kg of the crop was produced, surpassing all expectations and it drove agriculture to a 33% growth.Tobacco plays a central role in the economy contributing around 8% to the Gross Domestic Product.

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