By Kingsley Jassi and Benadetta Chiwanda Mia
Tobacco rejection rate may have declined last week to an average of 65 percent from as much as 98 percent in the first week, but volumes traded and prices remained low, figures show.
As at the third week of trading, according to Tobacco Commission (TC) figures, 12.3 million kilogrammes (kg) of all types of tobacco had been sold, raking in $26.1 million.
This compares unfavorably to last year’s performance, when 13 million kg of tobacco fetched $31.9 million at an average price of $2.28 per kg, slightly higher than this year’s $2.13.
For TC, the third week figures are enough to trigger hope that the season is coming to stability to build on the recent successes that saw tobacco regaining the old domestic sales glory.
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TC spokesperson Telephorus Chigwenembe said the market is progressing well.
“In terms of rejections, we are finding comfort in the progress we registered in the third week.
“In the first two weeks we saw daily rejection rates ranging between 90 and 100 percent. In the third week we saw rejection rates coming down to 65 percent in some days at different markets and we expect this positive trend to continue until we reach single digits or better still to zero,” he said.
This year’s market is marred by oversupply as records show an estimated national tobacco output of 190 million kilograms against the indicated demand of 170 million kilograms.
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Coupled with global oversupply this year, it is expected that the sales will be less competitive as the local buyers also had to buy excess tobacco last season.
Growers are worried, and Tama Farmers Trust has since called for tighter control on tobacco production.
Tama Farmers Trust President Abiel Kalima Banda said the auction market has virtually stalled, with most tobacco still being rejected.
“There is a slight change on the contract market because buyers are buying at the set minimum price. But at the auction, I don’t see any change because I can tell you that in the last few days, no single bale of tobacco was picked. All the bales were rejected. So this is not good for a farmer,” Banda said.
Banda also raised concern over delays in payments to farmers, saying some growers who sold tobacco on the opening day of the market are yet to receive their money.
He further claimed that some farmers were surprised to discover that proceeds from their tobacco sales were allegedly being directed into unfamiliar accounts.
“Farmers are surprised to see that their accounts have been changed in the system. The indication is that their proceeds will go into another account, not the account which the farmer has been using,” Banda said.
Commenters have since urged authorities to phase out auction systems that take up 20 percent of the total volumes sold and fully embrace contract farming under the Integrated Production System that comparatively give buyers control on production processes to ensure the required quality and quantity.
The Ministry of Agriculture, Irrigation and Water Development met with the tobacco buyers, the regulator and other stakeholders in an attempt to calm down the market that had started on a troubled note that saw auction tobacco lying unsold on the floors.
