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Tobacco sales in smoky start

 

Farmers expressed disappointment over low prices offered on the opening day of the 2017 Tobacco Marketing Season on Tuesday at the Lilongwe Auction Floors, but were happy that almost every leaf on offer was bought.

Random interviews with both farmers and buyers at the Lilongwe Auction Floors revealed farmers’ high expectations on prices this season on the basis that, this year, the country has produced less tobacco than the market demands.

Malawi has this year produced about 124 million kilogrammes (kgs) of all types of tobacco, against the required demand of about 154 million kgs.

Mutharika inspecting tobacco at the floors yesterday

Before the opening of the marketing season by President Peter Mutharika, some farmers said they expected their leaf to fetch between $2 per kg and $1.50 per kg.

But, at the end of the day, they had to live with the reality that the highest price for the tobacco offered on the auction floors was $1.80 (K1 319.4) per kg with only contract tobacco meeting their higher expectations at $2 (K1 466) per kg for the highest price.

However, The Nation noted that most of the tobacco went for between 80 cents per kg and $110 per kg, a situation that disappointed most of the farmers.

In an interview, contract farmer Lofiam Letesi said the prices were disappointing and not fair to farmers who toil to get quality tobacco to the floors.

He said: “Last year, tobacco fetched very low prices. As a result, most farmers resorted to [growing] other crops. But for us, who accepted the [market], we expected better prices because of the low production and also that the leaf this year is of good quality. The 0.80 cents being offered is not enough, considering the processes involved to get tobacco on the market.”

His sentiments were echoed by Emmanuel Mandindi, another contract farmer, who was not satisfied with the prices.

Mandindi feared that the trends in prices for the country’s major foreign exchange earner will give most contract farmers a raw deal after paying off their loans.

Several other farmers interviewed, both on auction and contract systems, shared similar frustrations.

However, the buyers called for patience, observing that yesterday was merely the beginning of a long marketing season which would likely prove more rewarding to the farmers.

Speaking in an interview, Alliance One managing director Hugh Saunders said the market had started much better than last year, expressing his expectation that prices will pick up along the season.

Tobacco Control Commission (TCC) acting chief executive officer David Luka said although it is too early to compare with the market last year, prices will pick up as the low supply will enhance competition and the market will stabilise itself. 

The market opened with only a 10 percent rejection rate, compared to 37 percent at the onset of the 2016 Marketing Season. The high rejection rate last year was attributed to overproduction.

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