Zimbabwe’s delayed tobacco auctions start, first sales open lower

The first tobacco to go on sale at the start of Zimbabwe’s annual auctions on Wednesday sold at a lower price than last year, as sales finally opened after delays due to COVID-19 restrictions.

The first bale sold was at US$4 a kg, which is lower than the opening price of US$4.50 per kg in 2019 and US$4.90 in 2018. Contract sales open on Thursday.

“It has not been possible to have a normal start to marketing season  in view of the unprecedented COVID-19. It is evident that the tobacco sales cannot be done in the usual manner during this era of COVID-19,” Pat Devenish, chairman of the Tobacco Industry and Marketing Board (TIMB), said at the floors.

Output is expected to fall this year to 230 million kg from the record 259 million kg grown in 2018, officials say. Planting was 117,000 hectares this season, down from 133,000 in the 2017-2018 season. Prospects of a lower crop had already showed last year after seed sales fell 20%.

“For this marketing season, the number of registered growers is 148,084 compared to 178,721 the prior year, with more than 7,609 growers having registered for the first time,” Davenish said.

Despite the record crop last year, average prices were 30% lower than in 2018.

Tobacco is Zimbabwe’s second largest foreign currency earner, and the government, desperate for dollars to shore up the economy, has been eager to allow auctions to start despite the coronavirus lockdown. Tobacco exports in 2019 were worth US$746 million, according to central bank data.

At Tobacco Sales Floors in Harare, the country’s main auction site, the crowds of growers and buyers that usually attend opening day were absent, as the industry enforced new measures to decongest trading to avoid the spread of COVID-19.

Under those measures, the TIMB is limiting the number of growers and buyers at the floors and has decentralised auctions to different sites across the country. Vendors and banks are also barred from the floors this year. Temperature checks, isolation facilities and nurses are also mandatory at contract sales floors.

Forecast

Despite the worst drought in 40 years, and rising inflation that has pushed up the costs of inputs, Agriculture Minister Perrance Shiri says Government still sees a 5% recovery in farm output, driven mostly by agriculture.

He, however, said farmers needed to invest more in cleaner methods of curing tobacco.

“We need to continue to put more effort in reducing the carbon footprint of tobacco on the environment by curing tobacco using renewable sources of energy and improved curing technologies,” Shiri told growers at the floors.

Globally, large buyers are shunning leaf cured by coal. Earlier on Tuesday, Cabinet announced that its programme to plant 202 330 trees under the Tobacco Wood Energy programme was 80% complete.

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