Decentralizing sales
The spectacular growth of Zimbabwean tobacco production has prompted Mashonaland Tobacco Co. to reopen its processing facility.
Zimbabwe’s tobacco auction companies have been given the green light to decentralize their operations during the next marketing season, which is due to start in March, according to a story in The Herald.
The move is expected to reduce the costs incurred by farmers in transporting their tobacco to the market.
The Tobacco and Industry Marketing Board’s chief executive Andrew Matibiri reportedly told The Herald that all three auction floors – Boka Tobacco Floors, Tobacco Sales Floor (TSF) and Premier – had been granted licenses to set up tobacco auction facilities outside Harare.
“Boka will operate from Rusape, TSF from Karoi and Premier from Mvurwi,” said Dr Matibiri.
With the volume of tobacco being sold by auction having been falling, concerns have been raised about whether it was feasible for auction floors to set up facilities outside Harare.
In the most recent flue-cured tobacco season, Zimbabwe produced about 180 million kg, of which 20 percent was sold by auction.
The Federation of Farmers’ Union (FoFU) welcomed the move, but urged the authorities to ensure there would be enough buyers at the new buying centers.
“This is good for the convenience of the farmer and it will reduce congestion at existing auction centers but we would want to see all buyers represented at the new centers to increase competition,” FoFU chairman Wonder Chabikwa said in an interview.
The Herald report said that Zimbabwe’s tobacco auction system used to be the marketing model of tobacco in the world, but that auction-tobacco volumes had shrunk as farmers, mostly those who benefited under the land reform program, had joined contract schemes because they did not have money to finance production.