News / National
Zimbabwe tobacco sales surpasses 220 million kgs target
18 Jul 2019 at 08:00hrs | Views
ZIMBABWE'S tobacco sales have reached 227,4 million kilogrammes, surpassing the set target of 220 million kilogrammes as at day 80 of trade, data from the industry regulator has shown.
Last year, the country produced a record 252 million kilogrammes of flue-cured tobacco, generating at least $1 billion in foreign currency earnings.
However, according to the Tobacco Industry Marketing Board (Timb), sales are down 35% to $ 445,1 million from $685 million in prior period.
The auction floors account for 30 million, whereas contract floors have 197,4 million kilogrammes.
The price of the golden leaf tumbled 33% to $1, 96 from $2, 92 same period last year. The highest price fetched so far is $5, 75 against $6, 25 earned last year.
Tobacco prices are in United States dollars, but payment to the farmer is made in local currency.
Farmers have an option to use 50% of their earnings to apply for forex at the official rate.
But farmers have been complaining that the process of converting money to hard currency is cumbersome and marred with irregularities. The season started off with merchants demanding exemption from paying the 2% tax on intermediate transactions, which was eventually waived.
They have also voiced displeasure at the arrangement put in place by the Reserve Bank of Zimbabwe of directing tobacco farmers to pay 70% of the loan amounts they sourced from merchants in US$, while the balance would be settled in RTGS$.
Previously a preserve for white commercial farmers, tobacco farming in Zimbabwe has, over the years, evolved to become the mainstay for smallholder and subsistence farmers, providing a source of livelihood for most of the country's rural populace.
Last year, the country produced a record 252 million kilogrammes of flue-cured tobacco, generating at least $1 billion in foreign currency earnings.
However, according to the Tobacco Industry Marketing Board (Timb), sales are down 35% to $ 445,1 million from $685 million in prior period.
The auction floors account for 30 million, whereas contract floors have 197,4 million kilogrammes.
The price of the golden leaf tumbled 33% to $1, 96 from $2, 92 same period last year. The highest price fetched so far is $5, 75 against $6, 25 earned last year.
Farmers have an option to use 50% of their earnings to apply for forex at the official rate.
But farmers have been complaining that the process of converting money to hard currency is cumbersome and marred with irregularities. The season started off with merchants demanding exemption from paying the 2% tax on intermediate transactions, which was eventually waived.
They have also voiced displeasure at the arrangement put in place by the Reserve Bank of Zimbabwe of directing tobacco farmers to pay 70% of the loan amounts they sourced from merchants in US$, while the balance would be settled in RTGS$.
Previously a preserve for white commercial farmers, tobacco farming in Zimbabwe has, over the years, evolved to become the mainstay for smallholder and subsistence farmers, providing a source of livelihood for most of the country's rural populace.
Source - newsday
