Tobacco earnings Hit k13bn in 2 weeks


Revenue from tobacco, the country’s main foreign exchange earner, hit $17.9 million (about K13 billion), a jump from the previous week’s $5.7 million (about KK4.2 billion), figures from the Tobacco Control Commission (TCC) show.

The revenue was realised from 12.6 million kilogrammes (kg) of tobacco sold at the Lilongwe, Limbe and Chinkhoma floors at an average price of $1.42 (K1 040) per kg, according to TCC.

Mzuzu Auction Floors will officially open for sales on April 30.

Tobacco sales in progress at Lilongwe Floors
during the first day of the market

The output comprises burley, grown by a majority of smallholder farmers, which has raked in $15.8 million (K11.6 billion) at an average price of $1.33 (K975) per kg and flue-cured, mostly the preserve of large estates, which raised $2.1 million (K1.5 billion) at an average price of $2.72 (K2 000) per kg on both contract and auction markets.

Compared to the first week of sales, the country raked in $5.7 million (K4.2 billion) from 4.3 million kg of tobacco at an average price of $1.30 (K953) per kg.

During the same period last year, the country realised $6 million  (K4.5 billion) from the sale of 3.7 million kg of the leaf at an average price of $1.61 (K1 180) per kg.

In an interview yesterday, TCC chief executive officer Kaisi Sadala said the prices have improved in line with the quality of the leaf.

“We are seeing more quality tobacco being brought and sold at the auction floors and going forward, the expectation is that we will continue to see improvements.

“Already, the rejection rate is within the accepted levels of about 25 percent although we need to do better on quality by ensuring that we minimise mixing the leaf with non-tobacco related materials and ensure that our tobacco is always dry and not dump,” he said.

Tobacco Association of Malawi (Tama) chief executive officer Mathews Zulu said the prices of burley are going down although they are not below the minimum prices.

“What we need to do is talk to buyers because we expect them to pay better prices for good quality leaf so that farmers are encouraged to grow tobacco next year.

“Maybe the weather aspect is also contributing to poor quality leaf as farmers have problems grading their leaf.

“So, we are looking forward to seeing better prices as the upper leaf is coming to the floors,” he said.

Zulu advised farmers who have not yet brought the leaf to the floors to take their time to grade the leaf because buyers are paying according to quality and presentation.

He said they have noted a few bales with ‘non-tobacco related materials’.

According to  TCC second round crop estimates, the country produced 147.8 million kg of all types tobacco, which is 14 percent below the buyers’ demand at 171 million kg.

Compared to last season, there is an increased output of about 38 percent as last year, the country produced about 126 million kg.

The tobacco industry plays a major role in the country’s economy.

The crop contributes roughly 13 percent to the country’s gross domestic product (GDP). n

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