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Tobacco Deliveries at Auction Floors Have Significantly Dropped

September 2nd, 2011 12:34

Tobacco deliveries at the country’s auction floors have significantly dropped as the majority of small-scale farmers have sold their yield worrying that the 170 million objective set at the beginning of the selling season may not be accomplished.

The slack deliveries have also increased worries that this year’s selling season might be the shortest and the Tobacco Industry and Marketing Board (Timb) won’t be prolonging the auctions.

Tobacco auctions significantly dropped

A short visit to the country’s main auction floors demonstrated the smallest activity as only several farmers could be seen there delivering their yield.

On Thursday 138 569 kg came under the hammer in comparison to 234 185 kg last year. Of the whole tobacco crop sold on Thursday, 73 724 kg were sold at Tobacco Sales Floor (TSF) at US$2,96; 23145 kg at Millennium Tobacco Floors at US$3,02 whereas 45456 were sold at US$3,17 at Boka Tobacco Floors.

Tobacco experts declare that the majority tobacco growers had delivered the yield to the auction floors beforehand expecting high prices, as offered the year before.

An analysis conducted by the Zimbabwe Tobacco Association demonstrates that the last year auction season started with average prices propped up at US$2, 50 on first day before increasing to US$3, 61 per kg by day six.

Nevertheless, this year tobacco prices dropped from US$2,50 on first day to US$2,30 by day four as small-scale growers beset the floors in expectation of advantageous prices that had been acquiring at the beginning of the selling season in 2010.

In much the same way, on day 55 of this year, 1,1million kg had been delivered at the floors while only 328 000 kg had been sold within the same period of the last year, an indicator which industry players have ascribed to the raise in the number of floors this year.

I suppose that the 170 million kg indicator would be reached as this was based on assessments, Timb chief executive officer, Andrew Matibiri stated.

This season is continuing and there is tobacco at the farms. It is not a case of optimism but this is all grounded on available estimates. It is too early to say when the selling season would finish, concluded Matibiri.

Several commercial farmers have been delivering tobacco crop at Boka Tobacco Floors and TSF as many small-scale growers have returned to their farms in order to replant the yield for next season.

Meantime, Boka Tobacco Floors cooperates with Timb in order to simplify the auctioning of burley tobacco.

Despite the fact that growing burley tobacco has less overheads, the yield is not preferred by the majority of small-scale growers as prices are not as advantageous as those offered for flue-cured tobacco.