🇿🇼ZimbabweSouthern Africa
Tobacco buyers deny price manipulation amid farmer protests over low prices
via NewsDay Zimbabwe5 min read
Major tobacco buyers have refuted claims of price manipulation this season, attributing low prices to global oversupply and weak demand. A senior executive from an international merchant stated there is no manipulation, citing oversupply and declining demand, and suggested that criticism stems from a misunderstanding of market dynamics. Another senior buyer pointed to poor crop quality from some farmers as a factor in low returns and accused the government of "firefighting" after encouraging a larger crop despite market warnings. These denials come amidst state media reports alleging that surrogate companies contribute to depressed prices. Local firms, referred to as surrogates, defended their role, highlighting that they employ over 2,000 seasonal workers and finance small-scale farmers who lack collateral and are often overlooked by larger merchants. An insider argued that surrogates take risks, integrate marginalized communities into the economy, and are wholly indigenous firms whose profits remain in Zimbabwe. They also contended that surrogates enhance competition and support prices, preventing larger merchants from colluding to suppress prices. China accounts for approximately one-third of global tobacco output, with India and Brazil also being significant producers. Merchants indicate that this surplus has reduced buyer interest, despite Zimbabwe's increased crop yield. Farmers have been protesting low prices since the marketing season began, with some withdrawing bale
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This summary was AI-generated from a story originally published by NewsDay Zimbabwe.
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