Zimbabwe’s tobacco auction is under way. Sales started on Wednesday, but it is widely expected that output will be low due to the ongoing drought in the country.
2016 production is forecast at 160 million kilograms down from 189 million in 2015.
The late onset of rains delayed the auction ceremony by three weeks. The erratic weather has also lowered production by 15 percent, and the reductions cut across the board.
72,000 growers have been registered this year down from 91,000 in 2015. The number of new growers has almost been halved from 17,300 to 9,000.
Farmers will this year be paid through bank accounts, a departure from the previous model where disbursements were made in cash. The system overhaul and depressed opening day prices elicited mixed reactions from farmers.
Zimbabwe is the world’s 6th biggest tobacco producer. It’s export fetched $855 million in 2015, nearly a third of foreign currency earnings.
