A slight improvement in tobacco prices on the auction floors did little to cheer farmers this week, with growers of the golden leaf protesting the delays in payment.
By Taurai Mangudhla
The farmers were against delays in payments and their failure to access cash as well as the introduction of a 10% withholding tax on farmers that have no tax clearance certificates. The tax was however suspended on Wednesday.
According to the Tobacco Industry Marketing Board (TIMB), auction and contract seasonal statistics show a 2,9% improvement in the price of flue cured tobacco on the 15th day of the marketing season compared to the same period prior year.
The average price stood at US$2,67 per kg of flue cured tobacco with the auction and contract price averaging US$2,62 per kg and US$2,69 per kg respectively. In 2016, the average price of flue cured tobacco stood at US$2,60 per kg on the 15th day of the marketing season.
The highest price obtaining on the market for the flue cured tobacco also went up by an average 7,14% to US$6 per kg driven by the contract system. The highest price at all the three auction floors was US$4,99 per kg while the contract system peaked at US$6 per kg.
The total amount of tobacco sold went up by 41,21% to 26,2 million kg compared to 18,5 million kg the same period prior year. Contract contributed 20,8 million kg to sales while the auction system contributed a combined 5,4 million kg to sales.
The value of tobacco went up by as much as 45% to US$70 million, higher than the growth in mass, driven by the marginal improvements in pricing. The contract system accounted for US$56 million while the auction system accounted for US$14 million.
The percentage of rejected bales went down by 4,8% to 6,93%. The auction system recorded the highest number of rejected bales averaging 11,53% with the highest rejection rate recorded at Premier tobacco Auction Floors at 14,55%.
The contract system recorded a 5,53% rejection rate.
The number of bales laid went up by 54,91% on prior year while the bales sold went up by 55,49% compared to the same period in 2016.
Rejected bales went up by 78% to 26,256 bales compared to 2 981 bales in 2016.