Brazil, which is one of the world’s leading tobacco producing nations, with an annual average production rate of 867 million kg, was earlier this year affected by floods, thereby putting a slump in world market supply.
Statistics from the Tobacco Industry and Marketing Board (Timb) show that by Wednesday last week, a total of 77 285 861kg worth US$292 million had been auctioned at an average price of US$3,78.
This represents a 16% increase in sales volumes from last year’s 66 215 954 kg sold during the same period. The figures show that by day 52 of the season, Tobacco Sales Floor offered a higher average price of US$3,71 per kg as compared to the other three leading auction floors.
The statistics also indicate a 29% decrease in rejected bales in terms of seasonal performance from 7,23% recorded last year. Timb chief executive officer, Andrew Matibiri, told Standardbusiness the quality of tobacco being delivered at all the floors was high and more of the golden leaf would continue to be delivered as farmers complete the curing process.
“The favourable prices obtaining at the moment are the result of a shortage of tobacco on the market and the fact that tobacco that originates from Zimbabwe is reputed for its good quality,” said Matibiri.
He said the Chinese market was buying 40% of the crop, West European market 35%, while the rest of the world was buying the remainder. “This year, we set 150 million kg as an estimate, not a target as is generally perceived. We use this estimate for planning purposes,” he said, adding that whether or not the figure was achieved, would be immaterial.
A total of 57 000 growers registered to sell their crop during the current marketing season from a preliminary 15 000 when the season began this year. A total of 131 million kg of tobacco went under the hammer last year, generating US$360 million.
Zimbabwe exports tobacco to a number of African countries including Mozambique, Kenya, Angola, Tanzania and Lesotho, among others.