Modest price increase

| May 4, 2018

The prices paid so far this season to Zimbabwe growers for flue-cured tobacco is up by 3.3 percent on that of the previous season, according to a story in The NewsDay.

The newspaper reported that Tobacco Industry and Marketing Board (TIMB) figures indicated that the average price of US$2.81 per kg as of last week was up by US$0.09 per kg on that of the same period of the 2017 selling season, US$2.72 per kg.

The president of the Federation of Farmers Union, Wonder Chabikwa, said the price increase was due to buyers fearing that production was down this season.

Meanwhile, the chief executive of the Zimbabwe Tobacco Association, Rodney Ambrose, said the rate at which the seasonal average was improving had slowed down due to daily prices being slightly below those of 2017.

“As volumes increase and better quality of tobacco comes onto the market, we hope the seasonal average will remain above 2017, whereas in previous seasons the average prices paid to farmers have been on a downward trend against increased costs,” Ambrose was quoted as saying.

He said the worldwide supply of tobacco remained relatively static, while demand continued to decline. But the quality of tobacco on offer in Zimbabwe was better than that of last season, and this should drive the market to pay more.

“Consideration should also be made in the case of Zimbabwe [of] the difference between the international US$ price paid for tobacco and the high local dollar costs,” Ambrose said, before adding that the industry appreciated the 12.5 percent Reserve Bank of Zimbabwe (RBZ) export incentive that would partially assist with the absorption of increased local costs.

“Our appeal to the RBZ remains – allow tobacco farmers direct access to US$ facilities,” Ambrose said. “Any form of additional funding made to support tobacco farming should be channeled towards improving the viability of farmers rather than targeting increased growers, hectares and volumes.”

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Category: Breaking News, Financial, Leaf, Markets, People, Sustainability

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