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Ministry of Finance News and Statements

Day One: 488 Bales Auctioned

17 February 2010

By Walter Muchinguri

THE 2010 tobacco marketing season opened yesterday with the first bale fetching an opening price of US$3,70 per kg.

This was an improvement from around US$3 per kg for the first bales that went on sale last season.

Prices for the other bales sold on the first day were between US$4,00 and US$0,80 per kg.

A total of 288 bales were on offer at the Tobacco Sales Floors while about 200 bales were laid at the Zimbabwe Industry Tobacco Auction Centre at the Boka Auction Floors.

There has been a slight adjustment to the cash pay-out for farmers with farmers now receiving US$2 000 in cash at the floors up from US$1 500 last season, with the remainder of their proceeds being deposited into their bank accounts.

Acting Agriculture, Farm Mechanisation and Irrigation Development Minister Dr Ignatius Chombo, who officially opened the floors, implored tobacco buyers to offer realistic prices.

"We expect prices to be better than last year and we hope that prices will be above US$5,50.

"Our foreign and local buyers should realise that our tobacco is well known for its good quality and taste, which is unparalleled in comparison to the crop from other tobacco growing countries such as Brazil and Malawi.

"If it were whisky, it would be equal to the best Scottish whisky that there is," he quipped.

He said the early opening of the marketing season should help farmers, especially newly resettled ones, to plan for a bigger crop well in advance.

Dr Chombo said this was critical as Zimbabwe was dependent on crops such as tobacco as opposed to other countries that had other resources such as oil.

"We might not have discovered oil in the Zambezi, but we have our soil and unique climate that enable us to grow cash crops such as tobacco which assist the country in a significant way," he said.

Dr Chombo also urged farmers to safeguard their proceeds against theft and encouraged them to make use of banks.

Tobacco Industry Marketing Board chief executive Dr Andrew Matibiri said they were encouraged by the opening prices which were an indication of better prices to come.

"This is encouraging given that these are just the primings, the lower leaf, that are coming onto the floors.

"We hope for better prices as the season progresses as the upper leaf starts coming in," he said.

Dr Matibiri said TIMB was also awaiting prices on offer when Brazilian markets open in the next week or two.

Brazil is the world’s largest tobacco grower while in Africa it is Malawi, whose floors are expected to open much later.

Dr Matibiri said the current system of holding two sales per week, on Tuesday and Thursday, would be reviewed once deliveries get to 3 800 bales per day.

Tobacco Growers’ Trust president Mr Wilfanos Mashingaidze also hailed the prices on offer.

"If you look at the quality of tobacco that is on offer here and some of the prices that are being offered, we are definitely heading for a better season this year," he said.

However, some farmers expressed concern about their tobacco which fetched lower prices after it was condemned for false ripening after it was affected by the sun.

A grower, Mrs Magna Gohwa of Macheke, said she hoped prices would continue to firm to above US$6 per kg.

She said some farmers had faced such constraints as false ripening because of too much sun. This had affected the quality of some of the crop.

Another farmer, Mrs Sizila Muchenje whose bale fetched US$1 per kg, said she had expected to get at least US$5 per kg given the effort and the financial outlay she put into growing the crop.

"It was extremely difficult to come up with this crop and I am a little disappointed because I expected higher prices which will enable me to go back to the field," she said.

A total of 77 million kg of the golden leaf is expected to go under hammer this year, up from 42 million kg last season.

About 45 percent of the output is scheduled to be auctioned with the balance being sold under contract.

http://www.herald.co.zw/inside.aspx?sectid=15498&cat=8

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