Zimbabwe Crop Value Estimated at $0.5 billion

Tobacco merchants are preparing to pay around US$500 million for Zimbabwe’s tobacco crop this year—significantly more than the US$440 million they shelled out last year, according to an article in The Herald, citing local industry officials.

Auction floors are scheduled to open April 7 for the self-financed growers while the contract sales begin the following day.

“We are well prepared for the marketing season,” said Tobacco Industry and Marketing Board Chairman Pat Devenish. “We are expecting a crop of 200 million kg and at an average price of US$2.50 per kg. We expect an estimate of around US$500 million.”

This season, tobacco growers will get 60 percent of their earnings in foreign currency while the remaining 40 percent will be paid in local currency using the auction rate.

One potential problem is looming in areas where cash-rich middlemen are trying to buy harvests at low prices for ready cash, which will present any contract farmer with legal problems when they come to deliver.

To discourage such fly-by-night players, merchants must submit copies of legally binding contracts by Sept. 30 of every year and proof of inputs distributed either paid up invoices or payment plans with suppliers.

Devenish said most merchants had met the requirements.

Assembly member Ngoni Masenda warned farmers against selling to fly-by-night merchants as they stand to lose in the long run.