The auction floors in Zimbabwe are now closed however, sales of the contracted crop, which make up 93.5 per cent, will continue until further notice. The Tobacco Industry and Marketing Board (TIMB) has also announced that the auction tobacco clean up sale for the 2021 marketing season will be held on 5 August.
176.6 million kgs worth USD 488 million were sold through the contract system, whereas only 12.2 million kgs worth USD 34.5 million were sold at the auction floors. More farmers are using contract farming as it offers assured funding and in previous years has seen them obtain higher prices for their tobacco. In the present tobacco marketing season, farmers reckon prices at the auction floors were firmer than those offered at the contract floors although the highest auction price was USD 4.99 per kg while the top price offered by a contractor was USD 6.70, reports The Herald.
Although happy with the firm prices offered this season, auction floor operators said something needs to be done about the low volumes passing through the floors.
“Prices were a plus this season, we are happy with the improvement on the prices offered at the auction floors. We are however still struggling as the auction market keeps shrinking,” said Boka Tobacco Floors managing director Mrs Chido Nyakudya. She said auction floors were necessary to determine fair market prices and said farmers needed to be offered sustainable funding if they were to produce their own crop and sell via auction.