Economic Insights - Hot Money Flows

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Tobacco Deliveries On Upward Trend

Tobacco deliveries surged to 17 million kg generating $61, 1 million by Tuesday, Day 19 of the current selling season, as more farmers began delivering the crop.

A daily tobacco seasonal sales statistical report released on Tuesday showed that the delivered crop represented an 8,7% rise in deliveries, with 15,7 million kg valued at $57 million having been delivered over the same period last year.


The average buying price is lower this year at $3,56 per kg as compared to last year’s figure of $3,64 per kg. The Tobacco Industry and Marketing Board (TIMB) attributed the rise in deliveries to an increase in the number of farmers taking their crop to auction floors.


“Weekly sales for both auction and contract (farmers) continue to increase steadily as more farmers deliver their crop for sale,” the weekly tobacco bulletin says. A week 10 tobacco bulletin released two days ago reads: “After four weeks of trading, the weekly throughput is amounting to 5, 9 million kg.”


“Daily average sales rose to 1,2 million kg for both auction and contract sales combined.” With three auction floors operating this season down from four last year, the tobacco board expects 170 million kg of the crop to be auctioned.


Tobacco Sales Floors, Boka Tobacco Floors and Premier Tobacco Floors are the only three floors operational since Millennium Tobacco Floors was closed. At least 145 million kg of the golden leaf worth $528m were sold last season in a period the tobacco board had earlier predicted 150 million kg of the crop would be sold.


The board later revised the figure down to 133 million kg after a crop assessment exercise. In the 2011 auctioning season, 133 million kg of the crop worth $362 million went under the hammer. The figures represent a gradual rise in deliveries as Zimbabwe hopes to surpass the all-time high 250 million kg mark attained in 2000 before the start of the land reform programme.


The golden leaf is one of the biggest revenue earner in Zimbabwe, a country whose economy is largely based on the agricultural sector.


Report by Garikai Tunhira

The Herald Online

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