Tobacco Asia

Volume 19, Number 2

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46 tobaccoasia LEAF NEWS 烟叶新闻 Zimbabwe Industry at Crossroads Zimbabwe's tobacco industry, a key agricultural sector regarded as the backbone of the country's economy, is facing an uncertain future with tobacco growers recently rioting at auction floors due to low prices being offered amid concerns about poor quality production. Experts say the new tobacco growers – mostly communal farmers who have ditched growing the staple maize crop and other grains – have been bringing lower grade tobacco known as primings to the floors. Every year sees a huge number of players registering to grow the golden leaf. For the 2014-15 growing season, there were 28,769 new registrations with Tobacco Industry and Marketing Board (TIMB), Zimbabwe's tobacco regulatory board. To date, about 93,450 growers have registered for the 2015 season as com- pared to about 102,396 who had registered by the same period last year, and new registration for 2015 are now at 17,466. Over the past 15 years, the sector has suffered following prolonged years of economic recession. TIMB, however, is optimistic the agricultural sector, driven by a resurgent tobacco industry, will recover. TIMB c.e.o. Dr. Andrew Matibiri told the African News Agency (ANA): "TIMB believes that national production levels will be determined by the tobacco markets and availability of funding. The production of 216 million kg in 2014, following a very wet 2013/14 growing season, indicates that the country has the potential to produce more." The 2014 auctioning season showed some signs of recovery, with 216 million kg of tobacco going under the hammer at the country's three floors – Boka Tobacco Auction Floors, Tobacco Sales Floor, and Premier Tobacco Floors. But things are not looking that rosy this year as concerns over the quality of the crop new farmers are bringing to the auction floors dominated discussions. Zimbabwe Prices Drop 22% Six weeks of tobacco marketing have raked in US$75 million from 28.4 million kg ( of tobacco, down 22.6% compared to the same period last year. The 2015 tobacco sales have been characterized by low prices, with farmers complaining that the prices were unsustainable and unfair, but tobacco experts have called on farmers to improve the quality of their crop to fetch good prices on the tobacco floors. Statistics from the Tobacco Industry and Marketing Board (TIMB) show that the average price of the tobacco sold to date was US$2.64 per kg. The bulk of sales from contract sales, currently holding 20.3 of flue cured at an average price of US$2.84 per kg, while auction floors sold 8.1 at an average price of US$2.15 per kg compared to US$3.08 per kg in 2014. Current year-to-date auction sales accounts for 29% of total tobacco sales and during a similar period in 2014 auction sales accounted for 31% of total sales. Sales to-date are now 10% less than during the same period last year. The current seasonal average price, although steadily increasing, remains depressed by more than 14% compared to last year's average price after 25 days of selling. Accusations of insider trading at the auction floors have also contributed to the decline in prices. Tobacco growers are losing vast sums of money to some unscrupulous buyers who have surfaced at the auction floors, working in syndicates to lower prices and condemn bales that they then clandestinely buy and resell at higher prices. With the re-surfacing of Class B buyers, farmers do not foresee the prices improving any time soon. "Buyers have complained about the quality of the crop that as farmers we understand to a certain extent, but what we have failed to understand is these people who are buying the crop at very low prices and selling the same crop at a higher price. These middlemen who are roaming freely at the auction floors must go," said Mashoko Shava from Wedza, a district in the province of Mashonaland East. At the start of the marketing season, TIMB chairperson Monica Chinamasa said the board had introduced a new system for re-handling rejected bales, where auction floors would automatically send the bales to certified re-handlers who would in turn re-offer the bales on behalf of the growers. However, accord- ing to farmers, it seems someone had manipulated the whole system and fleecing farmers in the process. "There is not enough money circulat- ing in the country so tobacco farmers are being targeted by everyone," Shava said. "Everyone who wants to make a quick buck is here at the auction floors and in all these shady dealings happening, the farmer loses a year's hard work." Prices at the auction floors have been ranging from US$0.10-$4.99 per kg (the highest prices so far). The highest price for contract sales was at US$6.25 per kg. Rejected bales for 2015 have increased by 18% from 30,741 bales recorded during the same period last year, to 45,154 bales. The major reason for bale rejection has been mixed hands. Seasonal exports in 2015 increased to 33,7 million for 2015. Canada Ontario Crop Surge Ontario tobacco growers delivered a higher-than-expected harvest of the 2014 crop despite unseasonably cool temperatures during the growing season. With the last deliveries posted by contracting buyers, the Ontario Flue- cured Tobacco Growers' Marketing Board reported that 241 licensed growers in Brant, Norfolk, Oxford, Elgin, and Middlesex counties delivered slightly more than 61 million lbs (m.lbs) of leaf grown last summer on 21,670 acres, which is an increase of about 4.3 m.lbs from 56.3 m.lbs in 2013, and it came from fewer farmers growing on a smaller acreage. The 2013 crop was grown by 243 growers on 23,269 acres. It means that despite those constraints and adverse weather conditions, growers managed to reap about 4.7 m.lbs of extra volume. "This is good news for the growers," said Haldimand-Norfolk MPP Toby Barrett, who is also the Progressive Conservative critic for agriculture, food

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