TOBACCO MARKETING AND PAYMENT ARRANGEMENTS FOR THE 2020 SELLING SEASON
Zimbabwe is the largest grower of tobacco in Africa and the 6th largest grower in the world. Three types of tobacco are traditionally grown in the country, namely Virginia (flue-cured), burley and oriental (air-cured) tobacco. The marketing of green leaf tobacco will, as is traditionally the case, be conducted either through contract farming sal., or the auction system which remains the best as it provides a transparent pricing mechanism for the benefit of all market players.
In order to enhance efficiency and to ensure that tobacco growers are paid timeously, the Reserve Bank of Zimbabwe (the Bank) and the Tobacco industry and Marketing Board (TIMB), have had consultations with stakeholders In the tobacco industry including tobacco merchants, tobacco auction floors and representatives of tobacco growers and will implement the following agreed arrangements for the 2020 Selling Season:-
(a) Tobacco growers will be required to adhere to the stipulated booking requirements for selling of tobacco at the auction or contract floors and tobacco growers without booking tickets for the day’s sale shall not be permitted to offload their bales at the auction or contract floors;
(b) Tobacco growers who have contracted loans in foreign currency shall pay the loans in foreign currency and as such upon sale of the tobacco, the foreign loans shall be payable and deducted from the proceeds of the sale of the tobacco and thereafter 50% of the sale proceeds shall be paid in foreign currency and the other 50% will be converted at the applicable exchange rate on the day of sale and paid In local currency;
(c) The foreign currency portion shall be paid directly into the growers’ foreign currency bank accounts (FCAs) and the 5096 local currency portion directly Into the growers’ local currency bank accounts or e-wallets on the day of the sale;
(d) Tobacco growers who do not have FCAs are advised to open FCA accounts;
(e) To facilitate adequate preparations and importation of inputs for the next growing season, the foreign currency entitlements for growers shall be treated as free funds and may be retained In their FCAs for an indefinite period. For the avoidance of any doubt, holders of such funds are permitted to conduct inter-FCA transfers or effect foreign payments without any
restrictions and the F. balances will not be subject to any liquidation requirements;
(f) Tobacco growers who require cash to settle immediate essential requirements such as transport expenses and other incidentals shall have access to cash, at a rate of ZW51.50 per kg of green leaf tobacco sold, up to a maximum of ZW52000.00. The maximum cash withdrawals may be reviewed as the Selling Season progresses; and
(g) TIMB will facilitate the necessary collaboration with the law enforcement agents to ensure the safety and security of tobacco growers at the auction or contract floors.