Tobacco prices down 38pc

LOW tobacco prices are threatening to dampen the 2016 marketing season which commenced last week with farmers expecting to reap huge rewards this year.

Statistics from the Tobacco Industry and Marketing Board (Timb) show that farmers have so far raked in $1,6 million from the sale of 976 000 kilogrammes (kg) of the golden leaf compared to $2,9 million recorded in the same period last year — a difference of 46 percent.

On day two of trading, tobacco prices declined by 38 percent to an average of $1,59 per kg this year against an average of $2,56 per kg in 2015.

While farmers are complaining that the current prices are unsustainable and unfair, tobacco experts have called on farmers to improve the quality of their crop to fetch good prices on the tobacco floors.

Agriculture minister Joseph Made last week said tobacco merchants are supposed to pay fair prices to enable farmers to have sustainable income that would allow them to continue farming.

“Government views tobacco as an anchor crop for the economic empowerment of our farmers and as an engine for rural development.

“Every year, at this time, tobacco farmers after having toiled for over 12 months look forward to getting a just reward for their efforts,” he said at the official opening of the selling season.
“It is therefore expected that tobacco merchants will pay fair prices for the tobacco to enable farmers to have sustainable returns.

“The expectation is that buyers will match quality tobacco with high prices at both auction and contract floor. Farmers deserve better prices for them to re-invest in tobacco production this coming season,” Made added. 

The tobacco industry, Zimbabwe’s biggest source of foreign exchange until the seizure of white-owned commercial farmers began in 2000, supported more than 100 000 registered growers as of 2015. Timb chairperson Monica Chinamasa said there was need to deal with corruption in the sector, which was draining millions of dollars from the growers.

“In my view nothing will unlock the tobacco sector’s potential more than ending the cancer of corruption at the selling points.
“Ultimately, the most powerful antidote for stamping out corruption is for stakeholders to work together for a common cause,” she said.

Zimbabwe is expected to produce 160 million kg of the golden leaf this year down from 198 million kg recorded last year due to effects of harsh weather conditions caused by El Nino.
The devastating drought has left more than four million people in need of food aid — according to the World Food Programme.

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