ZITAC gains market share

Indigenous-owned Zimbabwe Tobacco Auction Centre (ZITAC) is gaining market share in the lucrative tobacco business and this is being attributed to the larger crop from smallholder farmers expected this year.

According to the Zimbabwe Tobacco Association report for July, ZITAC saw its market share increase from 11 percent last year to 15 percent with about half the expected crop sold.

Some 40.7 million kgs of tobacco had been sold by the end of July at an average price of US$2.11 a kg.

Burley Marketing Zimbabwe’s share dropped from 35 percent to 29 percent while that of Tobacco Sales Floor, the major player in the market, increased from 54 to 56 percent.

This year’s crop is expected to be between 80 million kgs and 93 million kgs with the figures varying because no one is sure of the size of the crop from smallholder farmers.

Last year a total of 165.7 million kgs were sold at an average price of US$2.27. This too was a decline from the previous year when 202.5 million kgs were sold at an average price of US$1.75 a kg.

Farmers are reported to be withholding their crop is anticipation of better prices. Though the exchange rate has been adjusted to Z$800 to the greenback, compared with last year’s Z$159, farmers say the current exchange rate is not viable.

The ZTA says 4.1 million kgs of tobacco were exported in June at an average price of US$1.90 earning the country a paltry US$7.8 million. So far 62.4 million kgs have been exported, but this does not include any crop from 2003.

Stocks have increased to 77.5 million kgs.

The ZTA also says next season’s crop could be smaller according to seed sales figures available. They show that 91.415 kg of seed, enough for 18 283 hectares were purchased. This is a 31 percent decline from last year’s sales of 131.56 kgs over 26 312 hectares.

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