AHL calls for daily auction market

AHL Group wants auction tobacco to trade on a daily basis at the auction floors as is the case with the contract market.

Since government introduced an 80 percent contract and 20 percent auction market, tobacco for auction has been allocated two market days, Wednesday and Thursday, per week.

However, the development has proved to be costly for farmers on auction market and has often seen the sales being disrupted.

Speaking in interview on Tuesday, Minister of Agriculture, Irrigation and Water Development Allan Chiyembekza said the issue of market system is an internal matter that will have to be discussed and communicated to the public later on.

However, he said his office has not been briefed on the matter despite that AHL raised the matter during this year’s Tobacco Association of Malawi (Tama) area meetings launch in Mzimba where the ministry was also represented.

Chiyembekeza also said Tama was the right body to complain on the matter, arguing AHL is part of government.

Mzuzu Floors (AHL) manager Joseph Kawinga, in a recent interview, said there is need to consider having the auction market on a daily basis this year, arguing growers are suffering because they do not have fully access to the market.

He said due to the two days allocation, farmers fail to sell their tobacco on time which becomes costly to them. He said farmers who get loans also fail to pay the loans on time because their tobacco takes time to be cleared.

However, he said AHL was comfortable with the arrangement that market percentages should depend on the situation on the ground, that is if auction tobacco is higher than 20 percent and contract is lower than 80 percent, the market percentages should be adjusted to suit that.

But the challenge remains that auction tobacco is allocated two market days which if not changed would still see tobacco piling at the floors.

In an interview earlier in Lilongwe, AHL Group chief executive officer Evans Matabwa  was quoted as having said Malawi rushed to adopt the IPS model from Brazil when the structure of tobacco industry in the two countries are different.

The debate on which system is more effective for farmers continues to rage on as tobacco floors prepare to open.