Tobacco deliveries have reached 181 million kg, as contract floors continue to receive deliveries despite the curtain coming down on the selling season for auction floors late last month.

The 2020 tobacco auction season closed on August 28.

The Tobacco Industry and Marketing Board said it will announce the clean-up sale dates this month.

TIMB latest statistics shows the 181 million kg of tobacco grossed US$454,2 million.

The crop received so far is 24 percent less than the 243,6 million kg worth US$486,7 million that had been sold by farmers during the same period last season.

This season, the auction floors did not sell huge volumes of the crop due to the decentralisation, which was implemented to avoid the spread of the Covid-19 pandemic.

On day 93, farmers had sold 172,3 million kg of tobacco worth US$428,5 million through the contract floors, while auction floors sold a cumulative 9,1 million kilogrammes of tobacco worth US$25,7 million.

The highest price offered by buyers at the auction floors remained at US$4,99 per kg, while that of the contract floors was US$6,60 per kg.

The bulk of tobacco was produced under contract system.

Most farmers said contract farming has remained the most viable option since they receive inputs on time and are able to go back to the land even when prices of inputs go up.

Most contractors also have extension officers who are on the ground, monitoring the production of their crop and this reduces side marketing and also improves the quality of the leaf.

Financial institutions do not want to lend money to individual farmers. The situation is made worse by the fact that some institutions do not accept 99-year leases as collateral.