The 2011 tobacco selling season commences this morning amid high expectation of brisk business on the back of an improved agriculture season.
Contract sales are expected to begin tomorrow (Thursday).
Tobacco Industry and Marketing Board (TIMB) chief executive Andrew Matibiri on Tuesday said they were set for sales.
“Everything is in place,” said Matibiri. “We are ready as preparations have gone on well.”
Agriculture minister Joseph Made will officially open the floors at 7:30am.
The country’s economic recovery is hoped to be driven by agriculture and mining.
Agricultural output is estimated to have grown by 34% in 2010 and is anticipated to continue on the recovery path in 2011.
Tobacco output has been on a steady increase since the adoption of multiple currencies in early 2009.
Last year, the crop increased to 123 million kgs up from 58 million kgs in 2009. The average tobacco price last year was $2,28 per kg.
In 2011, tobacco output is projected to increase to between 170 and 200 million kgs due to increased hectarage. It is estimated that above 100 000 hectares of tobacco will be planted this year.
Average tobacco prices are expected to remain firm, reflecting global supply and demand conditions.
Reserve Bank of Zimbabwe governor Gideon Gono reckons the return of international buyers such as Japan Tobacco Industries and Premier Tobacco, is likely to boost tobacco prices.
At least 60% of the crop is anticipated to be sold under contract with the remainder in individual sales.
Twenty-one Class A buyers have been licensed by TIMB.
Boka Investments make a return to the auction floors after years of watching from the sidelines. Boka was re-licensed by the TIMB ahead of the Zimbabwe Industry Tobacco Auction Centre that has been operating at Boka auction floors.
Class B buyers, largely indigenous, will not take part this year. The buyers were suspended by TIMB on allegations of conniving to lower prices during the last selling season.
The buyers were introduced to purchase tobacco from farmers rejected by Class A merchants, re-handle and package it before reselling the crop to the Class A buyers.
Power outages and inadequate finances continue to haunt tobacco farmers, compromising the quality of the crop.
Reports abound of tobacco growers who have failed to cure their crop properly due to constant power cuts.
Zimbabwe Association of Tobacco Growers acting president Edson Makina yesterday expressed fears that the auction floors might not be ready to handle the huge number of farmers expected to visit the floors this year.
At least 60 000 growers registered with the TIMB this year compared to 52 000 farmers last year.
Farmers expect a good price for their crop. Makina said the lowest price should be at least $2,50 per kg if farmers are to break even.
“Merchants should be willing to pay for our tobacco,” said Makina. “We are made to understand that they sell to international markets at above $7 per kg.”
He also said TIMB had not made a proper assessment of the crop envisaged to be delivered at the floors as was the case last year.
Makina said last year a projection of 77 million kgs of tobacco had been made, but eventually 123 million kgs were sold.
He said this affected the price of tobacco as merchants had budgeted using the estimates provided.
Makina said there could be confusion regarding bookings because there has been insufficient publicity on them.