Tobacco growers call for early opening of auction floors

Tobacco growers have called for an early opening of the auction floors so that they can pay back their loans because high interest rates are threatening their viability. They have proposed the opening date as March 30. Floors usually open from mid-April.

According to the Zimbabwe Tobacco Growers Association about 60 million kgs of tobacco is expected this year, 20 million kgs less than last year’s crop, which in itself was one of the lowest.

Farmers have complained about the shortage of labour but say the supply of coal has improved significantly with some areas having as much as 80 percent of their requirements.

The ZTA says 8.9 million kgs of flue-cured tobacco were exported in December at an average price of US$3.53 a kg. Total exports for 2003 were 103.4 million kgs, down by 28 percent from 143 million kgs in 2002.

The exports earned the country US$318 million compared to US$425 million the previous year. Only 26 million kgs of the 2003 crop had been exported.

There were 90.7 million kgs in stock at the end of the year, 35 percent lower than at the end of 2002 when there were 139 million kgs.

The bulk of the tobacco was exported to the European Union. It took in 49 million kgs, a drop of 27 percent on the previous year.

Exports to the Far East dropped by 45 percent to 19.7 million kgs while those to Oceanic markets increased by 100 percent to 1.4 million kgs.

There are still three major auction floors: Tobacco Sales Floor, Burley Marketing Zimbabwe and Zimbabwe Tobacco Auction Centre (ZITAC) but eight contractors have registered with the Tobacco Industry Marketing Board.

These are TSL, GDI/ARDDA, Farmers World, Zimbabwe Leaf Tobacco, FSI, ZITAC, Wedzera Petroleum and Zimbabwe Tobacco Growing Company.

Farmers have also welcomed the new exchange rate policy which enables them to get 75 percent of their price on the auction rate and 25 percent on the official rate.

When the auction rate was about $4 200, the blend rate translated to $3 356.

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