Tobacco revenue beats target, now at $315m

Tobacco revenue now stands at $315 million (K108 billion) in the 19 weeks of sales, beating the $300 million (K103 billion) target set by authorities.

The proceeds have soared 6.4 percent from last week’s $296 million (K102 billion), according to Auction Holdings Limited (AHL) weekly sales report.

The report indicates that the $315 million came from 147.2 million kilogrammes (kg) of the leaf sold at an average price of $2.14 (K738) per kg.

According to latest figures, 126 million kilogrammes burley was sold, raking in $252 million (K86.9 billion) at an average price of $2 per kg; flue cured on the other hand, has brought in $56.6 million (K19.5 billion)  in revenue at an average price of $3.13 per kg with 18 million kg of the leaf sold.

Dark fired tobacco raked in $6.7 million (K2.3 billion) out of three million kg of the leaf sold at an average price of $2.14 per kg, according to AHL figures.

However, AHL observed that week 19 experienced a drop in average prices across all tobacco types as minimum prices were paid, indicating weak competition in the week.

In the same period last year, $167 million (K57.6 billion) was realised at an average price of $2.21 kg.

Limbe Auction Floors wound up sales of burley, grown by a majority of smallholder farmers, but sales of flue cured are still continuing for the next two weeks.

Tobacco Control Commission (TCC) public relations officer Juliana Somba-Banda last week said dates when the other markets, Lilongwe, Chinkhoma in Kasungu and Mzuzu, will close have not yet been fixed, but the expectation is that the whole marketing season will be over by end of August.

In an earlier interview, TCC chief executive officer, Bruce Munthali said the market is moving at fast pace and there has been quite substantial inflow of tobacco, especially burley tobacco.

He attributed the continued stability of the tobacco market to recent reforms that the tobacco industry has embraced from this year’s marketing season in March.

He said both earnings and the significant volume of tobacco sold, so far, speak volumes that the market is on course to earn increased revenue than of the previous years.

Tobacco is Malawi’s main foreign exchange earner wiring in more than half of the forex proceeds and accounts for 13 percent of the national economy.