Controls on tobacco cut forex in half

Government controls on tobacco sales have cut Zimbabwe’s inflows of much-needed hard currency by more than half, South Africa’s ‘The Star’ newspaper said on Wednesday. The government-appointed Tobacco Industry Marketing Board ruled in December that all sales be equally divided between the nation’s three tobacco auction floors - the dominant white-owned Tobacco Sales Floor and two smaller, black-owned auctions. Most tobacco is produced by white commercial farmers, who bring their crop to the Tobacco Sales Floor, meaning it has much more than its daily quota of 6,800 bales a day. The smaller auctions, however, sell much less than the daily quota. Pat Devenish, the head of Tobacco Sales Floor was quoted as saying that the quota limited his floor to selling about 40 percent of its capacity. “This has caused a bottleneck. It’s one reason so little tobacco dollars are coming into the country at the moment,” Devenish said. Farm occupations by war veterans and ruling party militants since last February have also reduced the harvest and some farmers were not bringing their tobacco to the market in hopes of a currency devaluation, the report said. Zimbabwe is the world’s second-largest tobacco exporter after Brazil, and tobacco is its top hard-currency earner. This year’s tobacco harvest is estimated at 190 million kg, down from 236 million kg sold last year.