The Tobacco Commission (TC) has expressed optimism that the ongoing 2019/2020 Tobacco Marketing season will rake in increased revenue.
By the second week of the tobacco sales, the country had realised $9.6 million (about K7.1 billion) compared to last year’s $7.5 million (about K5.5 billion), representing a 27 percent revenue increase.
This year’s prices are also promising to be better as at second week of the sales, average prices per kilogramme (kg) stood at $1.56 (about K1 154) compared to last year’s $1.28 (about K947) per kg, representing a 22 percent increase.
So far, the industry has sold about 6. 1 million kg compared to last year’s 5.9 million kg, representing a four percent increase in volumes sold.
TC chief executive officer Kayisi Sadala attributed the early positive outcome to quality leaf being brought on the market.
He said: “Generally, quality is better than last year same period. Buyers are offering better prices on contract than last season same time.
“Flue cured tobacco which attracts higher prices has been brought on the market earlier than last year thereby pushing both value and average prices.”
Sadala said due to auction challenges, the market is trading at less than 50 percent on the auction segment of the market although it has pushed more contract volumes.
He said if the trend continues, the country may end up realising more revenue albeit with slightly lower volumes.
Sadala boss said they expect auction performance to also improve further when all buyers start to participate as others were yet to start buying.
Tama Farmers Trust chief executive officer Felix Thole said he was satisfied with the progress of the market but expressed concern over the delay by some buyers to enter the market owing to logistical challenges in the face of Covid-19 pandemic.
Tobacco contributes about 13 percent to the country’s gross domestic product (GDP).