About twenty (20) tobacco farmers from Eastern Province who delivered their crop expecting it to be bought off by Alliance One have been left stranded and in a precarious situation after the deal fell off, threatening to cause them huge losses.
Alliance One Zambia is a local unit of Alliance One International which is a leading independent leaf tobacco merchant serving the world’s cigarette manufacturers. The company was formed on May 13, 2005, as a result of the merger of DIMON Incorporated and Standard Commercial Corporation, both world leaders in tobacco processing.
And the Tobacco Board of Zambia – TBZ has explained that the twenty farmers from Eastern Province who brought one million kgs of tobacco to be sold to Alliance One in Lusaka arrived two days after the company fulfilled its buying quota.
When asked what caused this situation which leaves the affected farmers in huge possible losses, TBZ Chief Executive Officer James Kasongo stated that this situation arose due to miscommunication between the company’s officers in Eastern Province and the headquarters in Lusaka.
Kasongo said the farmers signed agreements with Alliance One officers in Eastern Province but there was no confirmation of sales by the headquarters in Lusaka as they had established that their quota was fulfilled and their budget was exhausted.
He said TBZ held discussions with the farmers and allowed the one million kgs of tobacco to enter the sales floor despite having no buyer, adding that TBZ then negotiated with Alliance One who this month agreed to buy up about 684,000 kgs of tobacco leaving a balance of 330,000kg of tobacco.
The TBZ CEO added that Alliance One later agreed to buy an extra 123,400 kgs from the remaining 330,000kgs of tobacco which the company will buy before the end of next week.
Kasongo further revealed that TBZ has signed a contract with a Chinese company that will buy 50,000 kgs of the remaining tobacco and Rolland Imperial Tobacco will buy 10,000kg with Associated Tobacco Company buying the rest.
“People want to have their tobacco bought [off like] today, they are dealing with a company which has other headquarters, so they don’t understand that if we talk to Alliance One, it’s not just Alliance one in Zambia that will make the decision, It’s the corporate office that will make the decision and in the corporate office it’s not one person who makes the decision, it’s a board that decides and that can take a month to get feedback”, he said.
Tobacco continues to be a strategic cash crop that Zambia can utilize to boost its export exchange earnings as over 90% of the crop is exported. The country has good soils and weather conditions that can make Zambia turn this crop into a multi million dollar industry. Efforts to get a comment from Alliance One were underway at the time of going to press.
