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Tobacco farmers pocket US$460m

Ishemunyoro Chingwere Business Reporter
Tobacco farmers have been paid the equivalent of US$460 million, using interbank exchange rate, after delivering 233, 6 million kilograms of the golden leaf in the course of the current marketing season, Tobacco Industry and Marketing Board (TIMB) chief executive Dr Andrew Matibiri has said.

Dr Matibiri revealed this while giving oral evidence on the state of the tobacco industry before the Parliamentary Portfolio Committee on Lands, Agriculture, Rural Resettlement, Water and Climate chaired by Nembudziya legislator Justice Mayor Wadyajena.

Despite depressed deliveries compared to last year which saw record delivery of 253 million kilograms, Dr Matibiri said indications on the ground are that this year’s target will still be realised and so far projections are that 245 million kilograms will go under the hammer this year.

Projections had also been lowered due to drought which characterised the gone by season but the TIMB boss said activity on the market appear to point to a season least affected by the El Nino induced drought.

Tobacco prices are calculated in US Dollars but farmers are paid the equivalent in local currency using the interbank exchange rate which was at $8,89 to US$1 yesterday.

“Up to Friday July 19 2019, a total of 233,6 million kilograms of tobacco had been sold, at an average price of US$1,97 per kg,” said Dr Matibiri.

“What we have seen is that the average price is 33 percent lower than it was last year, last year this time the average price was US$2,92 per kilo.

“What we have seen is that initially the prices started off very low because of various issues that were being raised especially by merchants and contracting companies.

“But over the last four or five weeks or so we have seen prices slowly creeping upwards to the extent that the deficit or the difference in prices between last year and this year slowly went down from about 40 percent and its now at 33 percent,” he said.

Dr Matibiri also highlighted that the early season had been affected by farmers’ failure to “understand” the payment system due to them in line with the new monetary regulations.

Deliveries have however rallied back and the industry is currently handling between two and 2,5 million kilograms per day and the year’s total of 233,6 million kilograms is just two percent less than the same period last year.

He also noted the rising number of growers as more and more locals continue to take up the golden leaf.

However, there are issues in the market that some people are only registering for speculative reasons and are not essentially tobacco producers to which Dr Matibiri said over 70 percent of those registered had done delivered the golden leaf.

“Turning on to the number of growers, we now have a total of 185 892 farmers who are registered to sale this year and this can be compared to 145 694 that we had in our books last year.

“Yes there had been comments that the number of growers continues to rise but our records indicate that over 70 percent have actually produced something, they have actually delivered tobacco for sale,” he said.

Source : The Herald

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