Forex auction system impacts positively on tobacco sales

By ZBC Reporter
THE 2020 tobacco marketing season has reached its peak with prices firming and farmers now realising full value for their sweat, thanks to the Foreign Currency Auction System introduced by the Reserve Bank of Zimbabwe.

With the average price of the golden leaf ranging between 2.38 and 3 United States dollars at both contract and auction floors, farmers have been urged to take advantage of the prevailing lucrative tobacco market which has reached its peak.

“The introduction of the foreign currency auction system, has brought smiles to the farmers as they are now realising their full value, to the farmers they must take advantage of the high prices at floors which have reached its peak globally, this is time for them to intensify their deliveries,” said Taurai Jemedze Marketing Executive for Ethical Leaf Tobacco Marketing Expert

On the other hand, the tobacco experts suggested that the Central Bank should shift the Tuesday auctioning day to Friday to deal with speculation tendencies which have split the business week into two.

“We welcome the forex auction system as it has created a level playing field to the tobacco sector, but on the other hand the setting of Tuesday as the day for auctioning is affecting deliveries as farmers deliver more on Wednesday as they speculate for the new exchange rate, so if at least the RBZ move it to Friday, this will create the whole week of trading,” said Glandincore Tobacco Company Finance Director Donald Ganyaupfu.

Over 122 million kilogrammes of the golden leaf have so far gone under the hummer, raking in about 291 million United States dollars for the country.