The 2021 tobacco selling season has started today with the opening ceremony this morning at the Tobacco Sales Floor in Harare and with contract sales opening tomorrow.
Last year the first bale was auctioned at US$4 per kilogramme.
Minister Masuka said he expected prices to firm as the season progressed.
As was the case last year, sales will run under the strict Covid-19 guidelines developed by the tobacco industry with guidance from Lands, Agriculture, Fisheries, Water and Rural Resettlement Ministry.
Lands, Agriculture, Fisheries, Water and Rural Resettlement Minister Dr Anxious Masuka presided over the official opening which was also attended by his deputy Douglas Karoro, Tobacco Industry and Marketing Board chairman Pat Devenish and CEO Dr Andrew Matibiri, Tobacco research Board chief executive, Dr Dahlia Garwe, farmers’ unions and farmers among others.
The Tobacco Industry and Marketing Board (TIMB) has licensed the three traditional auction floors in Harare: Boka Tobacco Floors, Tobacco Sales Floor and Premier Tobacco Floors.
Only a modest fraction of the crop is now sold on auction, with most farmers and most of the crop going through the contract system.
As was the case last year, some of the contracting companies will operate out-of-Harare sales points.
Given the growing conditions experienced this year, a lighter, soft-natured and more mature crop is expected.
The tobacco regulatory body, TIMB said it was critical to fix tight operational modalities during this marketing season to ensure business is done in the safest possible environment for all stakeholders in the industry.
Stakeholders said they were satisfied by the opening day proceedings and expected prices to firm as the season progresses.
All auction floors conducted sales and said they were expecting deliveries to intensify in the next days.
Premier Tobacco Floors executive director Mr Owen Murumbi said last year they received less than 100 bales at the opening day but this season they had 450 bales.
“The crop was affected by excessive rain but we expect prices to improve as the season progresses.
“We have implemented all the Covid-19 regulations and Boka Tobacco Floors managing director, Mrs Chido Boka Nyakudya said she was happy with the prices on the first day.
“We had ,ow volumes of tobacco today because we have opened up floors in Karoi, Mvurwi and Rusape. We expect more farmers to sell through our decentralised floors.
“The prices so far are fair and we expect them to improve as we go further into the season,” she said.
According to the Zimbabwe Tobacco Association (ZTA), although yields will be down, the quality of this season’s crop is better than last year.
“While disease-affected, thinner crops may not be acceptable by all buyers, there remains a strong demand. Much firmer US dollar prices are expected that should push the national average price significantly up on last season,” said the ZTA.
This season, tobacco growers will be paid 60 percent of their earnings in foreign currency while the remaining 40 percent will be paid in local currency using the auction rate, with a higher foreign currency component than last year’s 50-50
Farmers were pressing for up to 80 percent foreign currency retention after their experience last year when farmers were hit by a static interbank rate that had lost touch with reality.
This year they are getting the market-related auction rate.
TIMB has put in regulations that merchants must abide by before they are registered to eliminate fly-by-night players.
The regulations meant copies of legally binding contracts had to be submitted by September 30 last year and proof of inputs distributed either paid up invoices or payment plans with suppliers.
Contractors also had to send TIMB a complete schedule of inputs and their costs by June 30.
TIMB chairman Mr Pat Devenish said most merchants had met the requirement and that contracting companies had largely complied with new regulations on funding their contracted farmers.
The Lands, Agriculture, Fisheries, Water and Rural Resettlement Ministry indicated that it was impressed by the level of preparedness by auction floors and their adherence to Covid-19 regulations.
Farmers said they were expecting a smooth season where they do not experience challenges especially on payments.
About 200 million kilogrammes of tobacco are expected to go under the hammer this season.
Last season, farmers sold 184 million kilogrammes.