Tobacco sales improve | The Times Group

Post was last updated: April 14, 2017

The low supply of tobacco on the market this season has already reflected on the rejection rate as it has dropped by 24 percentage points in the first three days of tobacco sales.

According to the AHL Group, the sales registered a 13 percent rejection rate on the first day at the Kanengo auction floors while at Chinkhoma market, which opened on Wednesday, the rejection rate was three percent.

This is lower when compared with the 37 percent the markets registered last year after the first day sales.

AHL Group Communications Manager Mark Ndipita attributed the trend to intense competition currently on the market triggered by low supply of the green gold.

He further indicated that this has seen an improvement in tobacco prices being offered on the market.

“The average price last year was $0.98 per kilogram while the average price this year is $1.17. This speaks volumes of better proceeds we should expect from tobacco sales this year,” said Ndipita.

Some farmers we spoke to said prices have started picking up, with some leaf fetching as high as $2 per kg.

They further said not many bales had been rejected this far, which raises hopes of earning enough from their labour.

They expressed confidence that the trend would continue as high quality tobacco would be offered on the market.

Large quantities of tobacco were last year sent back from the market for what the buyers described as poor quality, reaching a 99 percent rejection rate at some point in the season.

The opposite is expected this season as production reached 124,000 metric tonnes against a demand of 150,000 metric tonnes.

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