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REVIEW OF THE 2013 SEASON

This review covers the 2013 tobacco market season, highlighting market developments, crop estimates versus actuals, successes, challenges, and proposed strategies for improvement. Key areas include market highlights, successes in volume and value, challenges with quality and payments, and proposed solutions for a better future.

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REVIEW OF THE 2013 SEASON

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  1. REVIEW OF THE 2013 SEASON FRED KAMVAZINA TCC

  2. PRESENTATION LAYOUT • Opening dates • Market Highlights • Crop estimates versus actuals • Successes • Challenges • Way forward

  3. Opening & closing dates

  4. Market Highlights • Positive developments in Volumes sold and Value realised but unfavourable in prices compared to 2012 • Increased volume in all tobacco types by 111% • Increased Value by 103% • Reduced average price by 4% • Minimal market disruptions and rejections • Major difference in quality between IPS crop and auction • Reduced NTRM cases but nesting remains a challenge

  5. Market Developments: Sales volume (KG)

  6. Foreign Exchange Generation (US$)

  7. Average Prices (US$/Kg) By Crop Type

  8. 2013 Burley AVG Prices (US$/Kg) per Floor

  9. 2013 Flue Average Prices (US$/Kg)

  10. Crop Estimates Vs Actuals • Within the acceptance range: 4% lower than actual for all tobacco types • Bigger underestimation on NDDF (9%) • Improved over 2012 estimate results where actual outturn was 47% lower than estimates

  11. Crop estimates Versus Actuals: 2013 & 2012

  12. 2013 Minimum Prices versus Actual • Burley & Flue Cured registered competitive prices above Govt set minimum • Dark fired sold below minimum • NDDF & SDF sold at 3% lower than minimum

  13. 2013 Minimum Prices versus Actuals

  14. Auction Compared to Contract System • Govt set 80-20% share in favour of Contract for burley • Outturn shows 69% Contract and 31% Auction • Contract prices were higher by 21% over minimum against 15% higher for auction • Average Contract prices were above average auction prices by 5% for burley

  15. Successes • More volumes within shorter period: • 139 million Kg in 2013 against 79 million Kg over the same period of 17 weeks • Improved inflow of tobacco • Met the demand for Flue • Smooth selling • very minimal market disruptions • Very low rejection rates • Capacity utilisation of selling floors • NTRM has improved tremendously

  16. Challenges • Delays in payments for contract growers after fully servicing loans • Attainment of the IPS share in offloading • Mix up of contracted growers among merchants (some not even contracted) • Local varieties (certified & recycled) fetching more than supplied varieties • Extended trading hours • Misunderstanding on interpretation of new grades especially NDDF • Nesting still remains a big challenge • Buyers preference for sponsored over contract marketing crop • Delays in clearing purchased tobacco by merchants

  17. Way Forward • Train buyers on NDDF grades interpretation • Review payment system for contract farmers • Credible data and verification on contracted farmers to respective merchants • Review seed package for IPS • Review sale plan • Continue intensifying NTRM messages

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