US$240m tobacco passes through auction floors

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The solution to Zimbabwe’s economic crisis lies in expanding the major export receipt drivers such as tobacco.

A TOTAL of 83,5 million kilogrammes valued at US$239,8 million has been sold as at day 37, official figures from the Tobacco Marketing Board (Timb) show.

By Staff Writer.

During the same period last year, 61,6 million kg worth US$175,6 million were sold representing a 37% increase in tobacco earnings.

The average tobacco price per kg as of day 37 was pegged at US$2,87 up from US$2,85 sold last year.

At least 16,5 million kg of tobacco valued at US$40,9 million was sold at auction floors while 67 million kg worth US$198,8 million was traded at contract floors.

The highest price per kg offered at contract floors was US$6,25 while auction floors offered US$4,99.

Monetary authorities this year moved to compel all tobacco farmers to open bank accounts in a bid to promote financial inclusion, but delays in processing the transactions caused problems at the auction floors.

Compounded by the cash crisis, farmers mostly from rural areas are going for days before receiving their money upon delivering their crop.

Two weeks ago, tempers flared at the auction floors as farmers protested against the Reserve Bank of Zimbabwe’s decision to cap the maximum withdrawal at US$1 000 per day.

This year, the number of tobacco growers plunged by 22% from 92 430 last season to 71 728 after farmers failed to raise money for inputs due to poor prices. Production this year is projected to dwindle to 170 million kg from 199 million kg recorded last year.

Golden leaf farming evolved after the land reform programme into a broadbased income generator, bringing a ray of hope for most unemployed rural people to become a new face of economic salvation as 47 000 small-scale farmers ditched other crops preferring the cash crop especially after dollarisation.

Tobacco production reached a record high of 236,13 million kg in 2000. It then declined to new lows of 44,9 million kg in 2008 after the country embarked on the land reform programme in February 2000.

In 2010, production was 58,5 million kg before surging to 123,5 million kg in 2011 and growing further to 132,5 million kg in 2012. In 2013, 144 million kg was produced. In 2014, the country’s production grew to 216 million kg before dropping to 199 million last year.

With Brazil, India and Tanzania having downsized their tobacco production this year, it is estimated that global demand for the golden leaf will increase.

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