Last week the Tobacco Industry and Marketing Board (Timb) indicated that sales have jumped 33% despite the drop in prices.
Nicholas Kapungu, president of Zimbabwe Progressive Farmers’ Union (ZPFU) said members of his organisation were being frustrated by the prices on the auction floors.
“Our crop has on average been fetching between US$2,70 and US$3, with some of the crop going for US$4 per kg,” he said.
The average price at the beginning of last year’s marketing season was US$2,80 while this year’s initial average is US$2,59.
Tobacco Association of Zimbabwe (TAZ) treasurer, Edward Tome accused buyers of colluding to keep the prices down.
He said the trend had persisted over the years and was dampening the spirits of new farmers.
“Prices are disappointing,” he said. “Only a third of the total registered buyers are appearing at the floors, where are the rest?”
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To rid the market of speculators, Tome said Timb must license businesspeople who demonstrate that they have the capacity to deal in tobacco.
Kapungu said the problems had been exacerbated by the delays in the opening of the Boka Tobacco Auction Floors, which are undergoing renovations. He said banks were also delaying payments to farmers who are forced to wait for at least two days.
ZPFU, Kapungu said, was pushing for a system where farmers would be paid on the same day that their crop is bought to avoid situations where they would sleep at the auction floors like what happened last year.
A survey by Standardbusiness revealed that most farmers preferred selling their crop early because they believe it would fetch better prices.
“Last year on my first sale I managed to sell a bale that weighed 128kg at US$4 per kg amounting to US$512. I only subtracted US$12 to cover transport costs,” said Herbert Mhaka of Karoi.
“Later into the auctioning season I sold 10 bales that were better in terms of quality than that of the first sale but I only pocketed double the amount of the first bale (US$1 230). You can imagine the big difference, so it is always wise to target an early sale.”
White Banda, also from Karoi said he had learnt never to miss the first sale because that was where he made most of his money.
But the prices offered at the floors so far are likely to dampen Mhaka and Banda’s spirits.
Andrew Matibiri, the Timb CEO said it was the trend world over that low quality tobacco fetched lower prices on auction floors.
Matibiri said this season there would be no Class B buyers of tobacco following complaints from farmers that they were ripped off last season.
Timb expects 170 million kgs of tobacco to be delivered to the floors this year, up from last year’s 123 million kgs.
When Zimbabwe rose to become one of the leading producers of tobacco in the world, large-scale commercial farmers used modern machinery, overhead and drip-line irrigation, as well as permanent wage labour. But small-scale farmers who got land under the controversial land reform programme now dominate the sector with 60 000 farmers having planted tobacco this season.
Zimbabwe Tobacco Association, which represents mainly large-scale farmers, appeared not bothered by the prices with its president, Kevin Cooke saying they hoped the current levels were maintained.
Some bales have fetched as much as US$4,50.
