Oliver Kazunga, Senior Business Reporter
THE 2020 tobacco auction season comes to an end tomorrow while contract sales remain open until further notice, the Tobacco Industry and Marketing Board (TIMB) has said.
The golden leaf is being sold through auction and contract arrangements with the selling season traditionally beginning in March.
This year’s selling season began in April because of the adverse impact of the Covid-19 pandemic. The delay required TIMB to make adequate preparations to curb the spread of the deadly disease.
Speaking by telephone, TIMB chairman Mr Patrick Devenish said the auction system has this year played an insignificant role at the main auction floors due to the decentralisation of the crop’s sales to districts across the growing regions.
“As you know, the auction has played a very small role in the sale of tobacco this year because of the devolution of sales to the districts, so the auction sales are effectively over.
“The final sales day will be Friday this week and then we will wait until there are some bits and pieces of tobacco for clean up sale and this will be probably sometime in September,” he said.
The golden leaf is one of Zimbabwe’s major foreign currency earners and has of late been pivotal in anchoring the economy through liquidity support.
So far, about 176 million kilogrammes of tobacco have gone under the hammer generating close to US$440 million.
Commenting on the quality of this year’s tobacco sales, Mr Devinish said: “The quality of the crop this year has been quite interesting because on one hand, the top end of the crop has been very good quality.
“The bottom end of the crop has not been such good quality. So, it has been an interesting year where you have got quite a big range of qualities.
“As you know the crop sizes have been essentially smaller than the first crop and this is primarily due to the drought. People’s estimates were affected by the very poor rainfall received.”
Mr Devinish said due to drought the 230 million kg golden leaf target for this year might be missed.
Zimbabwe generates US$1 billion per year from tobacco exports. The country exports tobacco mostly to China, South Africa, Belgium, United Arab Emirates, Indonesia, Sudan and Russia among others. Zimbabwe exports 98 percent of the golden leaf produced locally with tobacco receipts from the foreign markets expected to reach $1,2 billion this year compared to $904 million achieved last year. — @okazunga.