83m kgs flue-cured tobacco goes under the hammer

A TOTAL 83,2 million kgs of flue-cured tobacco valued at US$ 223,1 million has gone under the hammer at the country’s three auction floors since the beginning of the selling season in February, figures released by the Tobacco Industry and Marketing Board (TIMB) show.

According to TIMB, the deliveries were 38,95% more than the 59,9 million kgs valued at US$182,2 million sold in the same period last year from the two auction floors.

The average price at this year’s selling season is US$2,68, 11,84% less than last year’s average price of US$3,04.

Of the 83,2 million kgs sold, Tobacco Sales Floor handled 24,4 million kgs valued at US$60,2 million, while Boka Tobacco Floors (BTF) sold 10,1million kgs valued US$21,3 million. Millennium Tobacco Floor (MTF) handled 5,5 million kgs of tobacco valued at US$11,6 million.

Contract farmers accounted for 43,1million kg valued at US$130 million. BTF and MTF started auctioning a month and half after the selling season started.
Of the 1 104 964 bales laid, a total of 1 026 622 were sold while 78,34 were rejected.

Analysts said deliveries were expected to increase following the opening of BTF and MTF which has eased congestion at TSF.

According to TIMB, Zimbabwe is expecting 177 million kgs this year from 123 million kgs which earned the country US$347,8 million last year. Government is, however, expecting 200m kgs.

China was the main buyer.

Zimbabwe is the world’s sixth-largest exporter of the flue- cured Virginia tobacco. It lags behind Brazil, India, the United States, Argentina and Tanzania, according to the website of Universal Corp, the world’s biggest tobacco-leaf merchant.

Zimbabwe Stock Exchange-listed TSL Ltd sees tobacco output reaching 150 million kg this year after a doubling in the last season to 123,5 million kgs.

“Tobacco production for 2011 is currently expected to be in excess of 150 million kilogrammes,” TSL said in its commentary accompanying results for the year to October 31 2010.

Fortunes in the tobacco sector have been particularly buoyed by adoption of hard currency regime in the country.

Previously, tobacco growers had suffered from delayed payments against the background of an accelerated erosion of value on the domestic currency which was under severe assault from runaway inflation.