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Tobacco rakes in US$64 million s far

Tobacco rakes in US$64 million s far 

Tobacco has raked in US$64,4 million from the sale of 28,2 million kg in 16 days, largely driven by higher deliveries compared to last year, statistics from the Tobacco Industry and Marketing Board (TIMB) show.

An estimated 97 percent of the tobacco delivered has come from the contract crop, with just three percent being sold on the auction floors.

Prices for contract tobacco have generally been better. Buyers have offered a highest price of US$6,60 per kg at the contract floors, while the highest price at the auction floors has remained at US$4,99 per kg.

In the same period last year, tobacco had generated US$18,6 million after selling 10,5 million kg of tobacco, about 37 percent of the deliveries so far this year. But sales started later this year, mainly as a result of needed measures to exempt them from the lockdown, so more of the crop was available for delivery, even with a later start to the growing season.

At this stage this year, 382 149 bales have been laid and 369 862 sold compared to 162 298 laid during the corresponding period last year, with 150 562 bales sold during the same period last year.

However, the contract market has continued to dominate sales, with the bulk of the crop having passed through contract floors.

Most farmers are now producing tobacco under contact farming.

Under this arrangement, farmers are guaranteed timely supply of inputs and, in some cases, funds to pay workers. Farmers get technical advice as the contractors want their crop grown according to market requirements.

Contractors have justified their prices at the floors, saying they would want to reward their loyal farmers so that they do not engage in side-marketing of the crop they have invested in.

So far, 27,4 million kg of tobacco have been sold through the contract floors, while 799 966kg have been sold at the three auction floors.

But contract farmers have, in some cases, complained of high inputs prices being charged by some contractors.

Tobacco production has been on the increase because of favourable prices being offered by buyers and an organised market where farmers get their money instantly.

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