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Senior Reporter
THE curtain on the tobacco auction system came down yesterday, with a total of 190 136 596 kgs of the gold leaf valued at US$526 172 654 going under the hammer.
However, the sale of the contracted tobacco will continue until further notice due to high volumes still being processed.
An auction tobacco mop-up sale will be held on August 5, with the duration being determined by the volumes to be delivered.
About 94 percent of tobacco is funded under contract farming, raising fears of a potential collapse of tobacco auction system (6 percent) in the country; which trails way behind revenues earned under contract farming.
Statistics released by the Tobacco Industry and Marketing Board (TIMB) for day 69 (yesterday) indicate that of the 190 million kgs, a paltry 12, 367, 504 kgs valued at US$35 million were sold at the close of the auction system, when compared to 178 million kgs, valued at US$491 340 885 sold under contract auction.
The majority of contractors are foreigners, who repatriate the earnings back to their countries.
The highest price offered this season remains pegged at US$6. 70 (contract) when compared to US$4.99 under the auction system.
The average price was US$2.77.
Online Reporter