ZIMBABWE Stock Exchange (ZSE), Victoria Falls stock Exchange and Tobacco Industry and Marketing Board (TIMB) have signed a MOU to fundraise for tobacco farmers and local merchants.
The MOU will also seek to establish a tobacco derivatives market and compile the distribution and marketing data for tobacco.
In a joint statement the parties said the MOU was necessitated by the funding and marketing challenges faced by small scale tobacco farmers, funding challenges faced by local tobacco merchants and the limited hedging instruments for farmers in terms of price and weather risks.
The MOU comes at a time when Government is pushing for the localization of the financing of tobacco, while the TIMB board was tasked with facilitating alternative and alternate tobacco uses to diversify revenues and assure industry sustainability in the face of climate change, lobbyists and cartels
In response the Tobacco Industry and Marketing Board is contracting 50 000 ha, up from the 12 000 ha contracted last year at an estimated cost of USD 60 million, and will be financed by local banks, including the Agricultural Finance Company.
Tobacco is a major foreign currency earner for the country and 67 025 farmers predominantly small scale farmers have registered for the 2021/22 tobacco season, compared to the 57 252 farmers who had registered at the same time last year, reflecting a 17% increase.
As of 31 August, 2021 cumulative sales were 208 816 935 kg, with prices being 12% firmer than last year, due to improved quality offerings by farmers. These deliveries have already surpassed 184 million kilogrammes received last year by 13.5%. The value of the tobacco deliveries is also 28% higher than last year.