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Growers ‘weep’ at Limbe floors

Tobacco growers selling their leaf at Limbe Auction Floors on Tuesday expressed worry at the prices the buyers offered, saying they are not enough to recoup their cost of production.

Prices at the floors ranged from 85 cents (K140.25, at the exchange rate of K165) per kilogramme to $2.20 (K363) per kilogramme, which is 15 cents (K24.75) shy from highest price the buyers offered on the first day of opening.

By 8:45am on Tuesday, the 1 446 bales the growers brought to the floors were completely sold out.

This confirmed worries by Tobacco Control Commission (TCC) chief executive officer Dr Bruce Munthali last week that the leaf’s inflows at the main market in Lilongwe and Limbe are disappointing.

Menard Jimu, a grower from Phalombe, said the principle of demand and supply is not working this time.

He said despite the leaf’s volume this year being low and quality good, the buyers are not responding by offering good prices.

“We thought that since the output this year is low, the demand for the leaf is not that much. We just don’t know what is happening to the buyers. Are they trying to tell us that they don’t need our tobacco this year?” queried Jimu.

He said under normal circumstances, the quality being good and leaf output low, the buyers were supposed to offer good prices.

This year’s output has slumped by 36 percent to 151 million kilogrammes from a record 237 million kilogrammes last year.

Group village headman Sulumbo of Zomba agreed with his many colleagues Business News spoke to on Tuesday, saying what is happening on the floors is frustrating and a blow to their hardwork in the fields.

“Things are not alright. I just don’t know what the future holds for me. I thought with the reduced volumes we produced, the prices were going to be better, but as it is, we do not know what the buyers really want,” said visibly worried Sulumbo.

He said all the bales he brought to the floors were bought at 85 cents (K140.25) per kilogramme.

Another grower, Wiliasi Meleka of Phalombe was not only worried about the low prices but said his seven bales were rejected with no apparent reasons given, despite that the leaf’s quality was good.

“This means I have to stay longer here than I planned. If it was a question of non-tobacco related materials, they put a red sign, but there is nothing like that. To produce one bale, I spend about K70 000 (about $419) and it was my hope that I would rake in a 100 percent profit, but as it is, I don’t know,” he said, as tears dripped from his eyes.

At the opening of the floors in Limbe, government and other industry players such as growers, TCC, Auction Holdings Limited (AHL) and Tobacco Association of Malawi (Tama) were optimistic that sales would be good this year.

Deputy Minister of Agriculture, Irrigation and Water Development Margaret Roca Mauwa who went around the floors, expressed happiness with the prices the buyers offered on the first day, saying they are within and above the set minimum prices for different grades.

“The quality of tobacco farmers have brought is better than last year. It is well graded, well processed and the leaf is well matured,” she told reporters.

She expressed hope that with the low output buyers should provide better prices because demand for the leaf is likely going to go up.

In at the official opening of this year’s selling season last Monday President Bingu wa Mutharika softened his stance and said he did not want to fight with tobacco buyers and growers and thereafter appealed for patience among growers.

Tobacco is Malawi’s strategic crop which wires in 60 percent of the country’s foreign currency revenue, contributes 13 percent to GDP and employs at least two million Malawians directly and indirectly.

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