Tobacco industry under threat, farmers warn

Tobacco farmers have sent a warning to authorities that they will not be able to go back to the fields if low prices persist at the auction floors.

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The farmers warned that the survival of the local tobacco industry is under threat as prices being offered this season might undermine the gains made over the years.

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Even downstream beneficiaries of the tobacco marketing season have also hit hard times as farmers are not making profit.

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After successive successful seasons in the past few years, farmers had migrated to the golden leaf expecting to make money but the current marketing season has been a big let down as prices have fallen to as low as 6 cents per kg.

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“How do these people expect us to go back to the fields next season,” asked one farmer.

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“We will be unable to buy inputs for the next agriculture season, let alone travel back to our homes after selling our produce,” said the other.

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The tobacco marketing season normally brings with it booming business at the floors.

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Suppliers of agricultural inputs and vehicles had set up shop at the floors anticipating brisk business, but the script has however turned horribly wrong.

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Bottled water, soft drinks and buns have become a dream for the farmers, while traders who used to cash in selling such commodities are also feeling the pinch of the depressed tobacco prices.

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An auction system is supposed to give powers to both the seller and the buyer but under the prevailing system, the buyers enjoy a double portion of power, inspecting and setting the prices they want.

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For the tobacco farmers who planted in tears, joy has not come as expected as their fate remain in the hands of those who choose to buy or not to.

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Meanwhile, hopes of a good tobacco season have gone up in smoke with seasonal sales pointing to a bleak marketing season.

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Sources in the tobacco industry revealed that stock piles of the crop from last season are still stashed in warehouses, thus suppressing demand for the golden leaf.

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Huge volumes of tobacco valued at between 50 million to 60 million kgs are stashed in local warehouses.

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Due to the depressed demand created by these stock piles, the current tobacco marketing season has been characterised by generally low prices as well as low sales volume.

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The Zimbabwe Tobacco Association however put the estimate of carry over stock at 10 million to 15 million kgs of mostly filler and no grade tobacco.

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Tobacco Industry and Marketing Board (TIMB) CEO, Dr Andrew Matibiri could not confirm the value of the tobacco stock piles or their existence but attributed depressed demand to two consecutive years of global over production.

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TIMB seasonal statistics of tobacco sales at the three auction floors indicate that last year the auction floor system sold over 8 million kgs last year in comparison to slightly over 6 million kgs at the same time this year.

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The value of sold tobacco during the same period shows a 37,4 percent decline, with 2014 registering sales of over US$23 million and 2015 registering slightly over US$14 million.