Home Business Opening Tobacco bale sold at US$4.30/kg

Opening Tobacco bale sold at US$4.30/kg

Tobacco Floor

Opening Tobacco bale sold at US$4.30/kg. The tobacco selling season commenced this Wednesday and the farmers expect higher prices this season due to improved quality. The opening bale of tobacco has been sold at US$4.30/kg which is higher than the US$4 in 2020 and is lower than US$4.50 of 2019.

Contract sales open tomorrow.

In a recent statement, the Reserve Bank of Zimbabwe (RBZ) recently announced that tobacco growers will be paid 60 per cent of their earnings in foreign currency while the remaining 40 per cent will be paid in local currency using the auction rate.

Farmers were pushing for up to 80 per cent foreign currency retention from last year’s 50-50. Some farmers are, however, welcomed the 60% retention describing it as “a positive development, on the ground farmers will continue increasing their tobacco production.”

Before the review, some farmers were reportedly contemplating ditching the golden leaf over the pricing model which they said was not commensurate with the effort they would have put.

Tobacco Industry Marketing Board (TIMB), chief executive officer Dr Andrew Matibiri recently said many farmers will be de-contracted and will be free to sell through the auction system this season. He expressed hope that would provide reasonable volumes to prop up the auction.

There were fears that with the demise of the auction system, farmers would be vulnerable hence the need to restore the viability of the auction system to cushion farmers from all kinds of abuse by the merchants.

Dr Matibiri also said if there were no enough volumes to prop up the auction, they were going to have “a mechanism to determine minimum prices to ensure that farmers are protected from any kind of price manipulation.”

Source – Pindula News

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