Farai Mabeza, Senior Staff Writer 
A DERIVATIVES market for tobacco could soon be set up in Zimbabwe after the industry’s marketing board last week entered into an agreement with the Zimbabwe Stock Exchange (ZSE) and Victoria Falls Stock Exchange (VFEX) to collaborate on innovation in marketing the golden leaf.
A derivative is a contract between two or more parties whose value is based on an agreed-upon underlying financial asset.
According to a joint press statement issued by the Tobacco Industry Marketing Board (TIMB), VFEX and ZSE, the agreement was reached to meet the funding and marketing challenges faced by small-scale tobacco farmers, capital constraints faced by local merchants and limited hedging instruments against price and weather risks.
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