Some tobacco growers in the country have expressed dissatisfaction with prices buyers are offering for the lower leaf (primmings), saying the prices do not meet their expectations.
The farmers said they were expecting good prices following reports that there is a drop in production of the ‘green gold’ by 14 percent due to dry spells that affected most parts of the country this crop growing season.
But according to the first round crop estimates which were released in February, growers have overproduced the crop by 33 percent against the demand of 158.1 million kilogrammes (kg). The estimates had put production at 211 million kg.
The Tobacco Association of Malawi (Tama), a tobacco growers’ body whose main objective is to serve the interests of its grower-registered members, has therefore said most of the concerns farmers are raising are based on speculation.
In an interview on Thursday, Tama chief executive officer Matthews Zulu said so far, prices for the season are good compared to the previous season, with buyers offering over 20 cents above the minimum price.
He urged the farmers to be more concerned with quality of the leaf to fetch better prices.
“We are aware that some farmers are not happy because there was speculation that supply was lower than demand and they thought this was going to trigger better prices forgetting that prices are based on quality and presentation at the auction floor. From our observation quality [of the leaf] is the problem.
“But we are still monitoring and watching the price trend especially for tobacco growers on contract because we don’t want farmers to fail to pay back their loans. We also engaged Tobacco Control Commission [TCC] on the same issue as this is our arbitrator,” he said.
Figures from TCC indicate that as of Wednesday, top quality tobacco fetched $2.40 (about K1 752) per kilogramme (kg) while low-quality tobacco fetched 80 US cents (about K584) per kg.
TCC chief executive officer Kaisi Sadala confirmed in a separate interview that contract farmers especially from Chinkhoma Auction Floors in Kasungu were not happy with the prices offered by the buyers.
“We think that in general, farmers are happy. We opened Chinkhoma yesterday [Wednesday] and prices were good even in Kanengo [Auction Floors] the prices have continued to improve every day. Of course, there were some contract farmers who were not happy with prices offered by their contractor but that was resolved after discussion, so, overall it’s OK.
“But even those that were not happy, they were not happy because prices were bad, but because they were comparing with what others are offering but from TCC perspective, we have noted that buyers are complying with the minimum prices that were pegged,” he explained.
Speaking when opening the tobacco marketing season at the Auction Floors in Lilongwe on Monday, April 9, President Peter Mutharika stressed to buyers and other players in the tobacco sector to respect farmers who work hard to produce the leaf.
He demanded fair prices and appealed for ‘uncompromised quality’ of the leaf from the farmer.
Tobacco industry plays a major role in the Malawi economy. Not only is it the main cash crop and accounts for 60 percent of all foreign exchange earnings, it accounts for more than half of the country’s export earnings and contributes roughly 13 percent to economic output.