Golden leaf earnings up 5,7pc year-on-year

Sales of tobacco in the ongoing selling season were up 5,67 percent during the first 30 days as the earnings hit US$ 149 million. Even though it is still in its early stages, the US$ 149 million already earned this year, compared to the US$ 141 million the same point last year, shows that it has the potential to be one of the finest seasons.

In the period under review, 49 million kg have been sold, which is a million kg more than during the previous season.

In spite of information indicating an improvement in the quality of the golden leaf being delivered by farmers, the average price has remained at US$ 3.

The Tobacco Industry and Marketing Board ( TIMB) claims that the pricing matrix for the current season is by far the most equitable one because prices have been firmer and the highest price has reached US$ 5,60.

This comes after the tobacco selling season is expected to boost the country’s foreign currency earnings with an estimated 8,5 percent growth in tobacco output of 230 million kg this year, compared to 212 million last year.

Since the tobacco marketing season commenced, over 44 million kg of the golden leaf have gone under the hammer.

Of the 44 million kg, 5 million went through the auction floors translating to over 10 percent of total tobacco volumes traded so far.

The trend is being cited as a reflection of increased interest by the small and large scale growers in venturing into the capital intensive, but viable tobacco growing industry. TIMB said it is anticipating increased business activities during the ongoing marketing season.

“I can confirm that the season is proving to be a success. As the regulatory authority we are happy with the transparency and accountability which is being shown while assuring real value for money in the entire tobacco value chain is being maintained,’’ TIMB said Pat Davenish, chairman.

The new board management’s initiatives to get rid of bottlenecks in the golden leaf business, which has seen average prices rise by over 7 percent, have impressed farmers’ representatives.

In view of the rigorous changes being led by the new administration at the TIMB, Zimbabwe Tobacco Industry Associations ( ZITOGA) President George

Seremwe, highlighted that there is finally light at the end of the tunnel.

“We approve of the direction the new administration at is TIMB heading towards. For instance, the payment system has much improved and auction floors have come back to life.

“The farmer is relieved at the end of the day because their yearly nightmares have vanished quickly,” he remarked.

Mtandwa Mutasa, a representative of smallholder farmers, believes that TIMB has received a new lease of life.

Farmers are ecstatic with what’s occurring at TIMB, he said. There is now more competition at different selling points because issues relating to side marketing are being addressed.

For many years, the tobacco industry has been plagued by scandals that led to the formation of powerful syndicates that cheated regular farmers.

This comes after 17 companies are not participating in the current tobacco marketing season after their applications were turned down by the regulatory board for failure to follow set guidelines.

The board wielded the axe on 17 tobacco buyers who failed to meet legislative requirements, while others voluntarily pulled out pending investigations into alleged illicit tobacco deals.

Prominent firms whose applications were turned down include Bullion, Munakiri Leaf Tobacco, InterAfrica Tobacco and Bigway Investments.

On the other hand, five tobacco contractors voluntarily pulled out from buying pending investigations into their alleged illicit deals by the tobacco regulatory body.

These include Mbaluki, Golden Ban, Huruyadzo, SaveMox and Dynamic leaving only 21 firms being registered for the season.

During the ongoing tobacco selling season, growers are being paid 85 percent of their earnings in foreign currency and the remainder in local currency.

Zimbabwe is pursuing the Agriculture Transformation and Sustainability Agenda and good returns from the golden leaf are set to set the tone for the attainment of a US$ 8 billion agriculture industry by 2025.

Tobacco is critical to economic growth as central bank data shows that the commodity accounted for a huge portion of the US$ 11 billion foreign receipts received last year.