Poor rainy season hits tobacco price

Poor rainfall in the 2014-15 season saw substantial amounts of poor quality tobacco lower leaves being delivered thus dragging average crop prices down.

Fidelity Mhlanga

TIMB CEO Andrew Matibiri told businessdigest on Tuesday in a telephone interview that lower leaves made the bulk of the golden leaf which went under hammer this year, with middle and upper leaves failing to blossom due to erratic rainfall that crippled the booming of this year’s season.

“The season in our view was difficult. It was hot and dry and most farmers did not plant on time. in,” Matibiri said.

“Lower tobacco leaves were of poor quality, did not have flavour and aroma. When it comes to selling lower leaves did not fetch good prices; due to the poor leaf quality the average tobacco price declined by 7%.”

According to TIMB figures, on the 88th day of the season the average 2015 tobacco price was pegged at US$2,93, down from US$3,17 recorded last year.

Auction sales attracted 46 million kg at US$2,44 per kg, down from 50,1 million kg sold at US$2,71 per kg realised in the same period last year.

The tobacco marketing season, which traditionally starts mid-February, was delayed until March 4 and had a relatively shorter tenure after deliveries at the country’s three auction floors ended this Wednesday, barely four months after opening day.
However, tobacco deliveries to contract floors will continue until end of July with final mop-up sales for both contract and auction floors set for August 4.

This year only 25% of sold tobacco was delivered to auction floors with the rest being channeled to contract floors. There is growing fear that if the trend continues it will cause the demise of the tobacco farming as is the case in the cotton industry.

Some auction floors have started to support farmers by way of providing free transport and hessian packs to lure farmers to their floors.

As a survival strategy, some floors have courted contractors to buy tobacco on their behalf. TIMB say seasonal sales for 2015 were at 184,3 million kg averaging US$2,93 per kg, compared to 203 million kg with an average of 3,17kg obtained last year.

Contract floors attracted a huge chunk of the golden leaf, 138,3 million kg at US3,10 per kg compared to 152,9 million kg recorded in 2014 at US$3,33 per kg.

This year’s tobacco season got off to a false start as farmers protested against poor prices offered at the floors on the first day.

On that day TIMB chairperson Monica Chinamasa slammed tobacco auction floors for offering lower prices compared to contract buyers, amid allegations of price collusion in the tobacco buying process.

This year’s tobacco deliveries fell short of the projected 216 million kg to 195 million kg.

Meanwhile, Matibiri said the civil works that include road works, parkways and painting for the new TIMB offices were underway with the contractor expected to hand over the building in September this year.

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