Farmers have earned US$13 566 from the sale of 7 815 kg of flue-cured tobacco on the opening day of this year’s tobacco marketing season, as contract floors continued to offer higher prices than those offered by buyers at auction floors.
Generally, farmers test the waters on the first day of the auctions, sending in lower quality leaf while reserving the best leaf for when prices firm. Farming organisations were not dissatisfied with the prices on offer on the first day.
Last season, farmers sold 3 886 kg of tobacco worth US$7 116 on the first day of the marketing season.
The 2020 marketing season opened last Wednesday, with contract marketing starting on Thursday.
Tobacco Industry and Marketing Board (TIMB) statistics indicate that 104 bales were laid, with 97 sold compared to 51 bales sold last year.
The highest price offered by buyers at the auction floors was US$4 per kg, which was 50c lower than the US$4,50 per kg offered on the opening day last year.
However, buyers have continued to offer higher prices at the contract floors, with some farmers reporting prices above US$5 per kg.
Some contractors say they offer more money to incentivise their farmers, while others said they would have invested a lot of money in the production of the crop, and will offer a higher price to prevent side marketing.
Boka Tobacco Floors managing director, Mrs Chido Nyakudya, said deliveries were still low as expected on all the opening days.
“Farmers are trying to figure out how to align with the new guidelines and check on pricing. The other challenge that farmers are going to face is that most of them have been relying on small trucks to deliver and this season they cannot use such trucks as this is against the TIMB Covid-19 regulations.
“The other thing that may affect farmers this season is the issue of having to send representatives. This industry has been built on trust; some farmers had their own transporters and cannot switch to new operators. The TIMB guidelines are good for safety but may affect some farmers,” she said.
Deliveries are expected to start picking from today.
Zimbabwe Farmers Union (ZFU) director Mr Paul Zakariya said it was too early to comment on the prices and deliveries to the floors.
“Farmers are still testing the waters. They will not bring their best leaf nor all of their tobacco. The trend has been like that for the past years. Few farmers will bring the good quality crop during the opening days,” he said.
Mr Zakariya said last season, there were concerns by farmers on the issue of collusion by buyers and it is hoped there will be no collusion this season.
On contract prices, Mr Zakariya said they have always been higher than the auction floor prices, but expressed concern over the high cost of inputs charged by some contractors.
Indigenous Commercial Farmers Union President Mrs Mayiwepi Jiti said the prices were fair considering that it is early days in the season and most farmers were bringing in the lower leaf.
“The prices of tobacco at both the auction and contract floors are good. We hope the prices will continue improving as the season progresses and when farmers start to bring the middle and top leaf,” she said.
Mrs Jiti urged farmers to continue exercising social distancing to curb the spread of Covid-19.
Tobacco production has been on the increase for the past years, with farmers selling a record 259 million kg last year, up from 253 million kg in 2018.
Government has encouraged farmers and the tobacco industry to venture into value addition to increase value of exports in line with the Transitional Stabilisation Programme and Vision 2030 of uplifting the country to become an upper middle income society.–herald.c.zw