Zimbabwe: Tobacco Marketing Season Brought Forward

THE 2010 tobacco marketing season will start in two weeks’ time in a move that is a departure from tradition where the floors open towards the end of April or early May.

According to a statement released by the Tobacco Industry and Marketing Board, two floors, Tobacco Sales Floor and Zitac, will open on February 16.

Burley Marketing Zimbabwe, bought by Savanna Tobacco last year, did not register to sell tobacco this year.

TIMB chairman Mr Njodzi Machirori told guests during a luncheon to mark the end of the 2009 tobacco marketing season last week that the decision to open the floors early was in response to a request from growers and contractors.

“This decision was reached after the board’s consultations with auction floors as a result of the pressure we have been receiving from contractors and their farmers to open early,” said Mr Machirori.

However, he pointed out that they were concerned that the call for the early opening of auction floors was coming from farmers and contractors that had not sold their crop in the previous marketing season.

“It is illegal for any farmer to hold on to tobacco unless he declares it to us and cures it from fungal attacks since there are various diseases that affect the crop.

“It has been learnt that most contractors have been holding onto the crop for speculative reasons.

“We do not allow that as a board, as the nation needs to gather all tobacco produced in a season in order to accrue maximum benefits from the crop,” he said.

TIMB chief executive Dr Andrew Matibiri said farmers had said that they wanted the floors to open early in order to ease their cashflow constraints as well as their ever-increasing overheads.

“Most farmers at the moment have cash constraints and by opening the floors early they can quickly sell their tobacco and offset their loans as well as reduce their interest.

“Besides, farmers will also cut on expenses and losses that come with keeping tobacco that is ready for the market now, until April or May,” he said.

Dr Matibiri said that by opening the marketing season early, they will effectively deal with the congestion that usually comes at the beginning of each marketing season.

He said contractors also wanted the marketing season to open early to allow farmers to quickly repay their loans so that they could, in turn, also repay their loans to banks.

“This allows for the contractors to secure fresh funding for the next season well ahead of time,” he said.

Other issues considered were that by opening early, farmers could start mobilising funds for their seedbeds which should be in place by June or July as opposed to the previous case where the seedbeds became due when farmers have no money.

Dr Matibiri said they also wanted farmers to have money ahead of the winter cropping season for crops such as wheat.

“If farmers sell their tobacco early, they can manage to finance their winter crops such as wheat on their own,” he said.

TIMB set a target of between 80 million kg and 100 million kg of tobacco to be grown this year.

However, a total of 65 202 hectares has been put under tobacco this season, of which 11 000ha was under irrigation.

The hectarage under tobacco will yield 77 million kg, which is about three million kg short of the TIMB target.

About 45 percent of the crop is set to be sold under auction with the balance being sold under contract. There were 28 000 farmers that sold their tobacco last year and TIMB has so far registered 21 000 farmers this year.

A total of 42 million kg of tobacco was produced last year although the total amount sold by the end of the marketing season was 58,5 million kg with the balance coming from the remainder of the crop that remained unsold during the 2008 marketing season.

The 58,5 million kg brought in just over US$175 million as prices peaked above an average of US$2,97 per kg.

Last year’s marketing season was a success due to the adoption of the multiple currency system which saw growers being paid US$10 000 in cash for their sales soon with the remainder of their proceeds being deposited into their bank accounts.

This saw a marked increase in deliveries and the disappearance of problems that had plagued previous marketing seasons that were characterised by farmer protests at the floors.
3 February 2010, Allafrica

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