HomeBusiness DigestPrice of flue cured tobacco slips by 2%

Price of flue cured tobacco slips by 2%

THE average price of Zimbabwe’s flue cured tobacco slid by 2% to US$2,74 per kg in the first 27 days of the marketing season, latest figures show.

By Taurai Mangudhla

The highest price of flue cured tobacco as at April 25 stood at US$6 per kg, down from US$6,25 per kg prior year, according to figures obtained from the Tobacco Industry Marketing Board (TIMB) .

TIMB said the highest price of US$6 per kg was derived from the contract buyers while the auction floors paid a maximum price of US$4,99 per kg.

The lowest price of tobacco obtaining both on the auction and contract system was US$0,10 per kg although the least amount paid by premier tobacco floors was US$0,20 per kg.

Despite a decline in the average price of tobacco, the value of the golden leaf sold so far went up by 25,59% to US$180 962 633 following a 28,13 % growth in total mass sold to 66 112 978 kg.

The bulk of the tobacco sold was under the contract system amounting to 52,8 million kg valued at US$144,7 million.

The number of bales laid went up by 29% to 941 while rejected bales went up by 61, 76% to 54 bales.

The percentage of rejected bales however went down to 5,78% from 6,34% the previous year.

A reduction in tobacco prices could be a cause for concern to government following years of disgruntlement among producers of the golden leaf on account of poor prices and marketing systems.

In the first 15 days of the marketing season, growers of the golden leaf protested the delays in payment.

The farmers were against delays in payment 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 immediately suspended.

On day 15, auction and contract seasonal statistics indicated a 2,9% improvement in the price of flue cured tobacco compared to the same period prior year. This however did little to cheer farmers who protested.

Tobacco is Zimbabwe’s second largest foreign currency earner after gold.

Notwithstanding the incessant rains that have caused flooding in some areas, Finance minister Patrick Chinamasa sees foreign currency earnings improving this year, driven by the cash crop.

Statistics from the TIMB show that as of December 29 2016, a total of 164,5 million kg of tobacco valued at US$933,6 million has been exported to various destinations across the globe.

Stakeholders in the tobacco industry have pegged this year’s golden leaf output at 200 million kg despite indications excessive rains may militate against a better yield.

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