Tobacco sales earnings clock US$292,5m

Oliver Kazunga, Senior Business Reporter
A TOTAL of US$292,5 million has been earned from 109 million kilogrammes of tobacco that have been sold since the start of the selling season in April.

During the same period last year, 80,9 million kg of tobacco had been sold raking in US$186,5 million.

Latest statistics from the Tobacco Industry and Marketing Board (TIMB), show that the average price of the golden leaf remained firm at US$2,68 per kilogramme.

During the same period last year, the tobacco price averaged US$2,30 per kg. So far, 1 452 818 bales of the crop have been sold compared to 1 032 647 in the comparable period last year.

The bulk of the crop, as has become the norm, has been sold through the contract floors.
Contracted growers have sold 101,6 million kg worth US$ 272,3 million while 7,4 million kg worth US$20,2 million were sold through auction sales.

Tobacco farmers have this year produced a high-quality crop due to the favourable rains and are expecting high demand since the volumes, at around 200 million kg, will be slightly lower than in the previous seasons.

TIMB and Reserve Bank have built up a set of rules to ensure both contractors and farmers were committed and act fairly.

For example, in 2020 before the contracts were finalised contractors wanting to participate had to first provide proof of commitment or intent to the TIMB and then submit to TIMB a complete schedule of inputs and their costs by June 30.

Copies of legally binding contracts had to be handed to the TIMB by September 30 along with proof of inputs distributed using paid up invoices or payment plans with suppliers.

As such, this was to ensure farmers were dealing with competent registered and properly funded contractors.

Side marketing is banned under the contract system, with all farmers under contract expected to fulfil their side of the agreement.

The golden leaf is Zimbabwe’s second largest foreign currency earner after gold. The country exports its tobacco mostly to China, South Africa, Belgium, United Arab Emirates, Indonesia, Sudan and Russia among a host of other consumers of flue-cured tobacco from the country.

Zimbabwe exports 98 percent of its golden leaf. — @okazunga