Tobacco deliveries decline for 2015

A total of 158,5 million kgs of tobacco worth US$469,1 million has so far been delivered at both auction and contract floors, the tobacco industry marketing board has said.

Fidelity Mhlanga

TIMB figures shows that at day 69 of the selling season the golden leaf deliveries tumbled by 6% to 175,5 million kgs where tobacco valued at US$558,2 went under the hammer last year.

So far auction floors have received 42,2 million kgs of tobacco valued at US$104,7 million at an average price of US$2,48.

Tobacco sales floor received 20,4 million kgs, Boka Tobacco Auction Floors 12,8 million kgs, Premier tobacco floor 8,9 million kgs respectively.

The average price of US$2,96 is 6,9% down from US$3,1 recorded at the same period last year.

At the contract floors 116,3 million kgs of tobacco valued US$364,3 million has been sold.

Timb chief executive Andrew Matibiri on Wednesday confirmed that tobacco deliveries at the auction floors had fallen with the bulk of the golden leaf now being channelled to contract floors.
To improve transparency in the pricing of tobacco, Matibiri said next month Timb would be carrying out pilot runs on the e-marketing system.

The e-marketing system will be used in the bidding process where buyers would use personal digital hand held gadgets to secretly bid for tobacco without the influence of other buyers.

The computer system broadcasts the auction start price and the bale details to the hand-held terminals of all the buyers currently logged in.

The Timb computer system then marks the last highest bid placed as the winning bid, and informs all the buyers of the end of the sale of that particular bale of tobacco without details of the buyer who won the sale.

“We will be doing dummy runs this year and next year the concept will be functional at both auction and contract floors.

“We need hand held gadgets, we have servers already.

“We will also put Wifi for the system to be operational,” Matibiri said.

Timb say the fact that tobacco bales will be tagged electronically with the individual farmer’s details should assist in reducing side-marketing, illegal sales and theft of tobacco.

Electronic auctioning of tobacco will reduce the processing time for grower payments and eliminate illicit floor activities like ticket tampering.

In its 2015 national budget, government projected an output of 222 million kgs of tobacco from 90 000 hectares.

However, the industry’s projections are much lower with expectations of 190 million kgs.

This year’s tobacco season has been adversely affected by erratic rainfall, floods that pounded the country end of December and poor selling prices, among other factors.