Some tobacco farmers have decried delayed payments, noting that three weeks after the market opened on April 20, they are yet to receive the money for sales.
In an interview on Tuesday, Tama Farmers Trust president Abiel Kalima Banda confirmed that farmers’ accounts have not been credited since the sales started, a development he said is worrisome.
He said: “We don’t know what is happening because usually farmers receive their money within 48 hours after sales.
“Farmers desperately need money after months of investment. As you know most tobacco farmers rely on the money to buy other basic needs and any delay affects their planning and livelihoods.”
In a separate interview, AHL Tobacco Sales Limited general manager Graham Kunimba, whose firm manages the floors, said there might be several factors, including delays by merchants to pay, inactive bank accounts or failure by farmers to fill bank details.
However, he said they are yet to get complaints for specific cases and that AHL Group processes the payment into farmers’ bank accounts after the merchants have remitted the money.
Said Kunimba: “The payment process is that AHL Group pays when the merchant has paid. If merchant delays to pay, AHL will likewise delay as we only pay when buyer has settled.
“Once a buyer has paid a grower, they get paid between 48 and 72 hours taking into account the process flow from AHL to banks and within inter-banks.”
He insisted that other farmers are being paid, saying AHL Group would appreciate to get details for specific responses, highlighting that apart from merchants’ delays, other factors are “issues like loans, inactive bank accounts and non-filing of grower banking details”.
There was no immediate reaction from the merchants or buyers while Tobacco Co m m i s s i o n ( TC) spokesperson Telephorus Chigwenembe asked for more time before commenting on the matter.
Meanwhile, according to TC data, the leaf has raked in $26.1 million (K45.7 billion) after selling 12.3 million kilograms (kg) at an average price of $2.13 (K3 729) per kg. This is compared to $31.9 million (K55.8 billion) realised during the same period last year at an average price of $2.28 (K3 992) per kg.
But Kalima Banda said prices remain low compared to last year.
However, Chigwenembe observed that rejection rate has improved from 90 percent to around 65 percent after the Minister of Agriculture, I r r igat i o n and Wate r Development Roza Mbilizi engaged the buyers.
“The rejection rate remains high and worrisome. However, we are sure the trend will be reversed,” he said.
TC is on record having warned farmers that due to overproduction that has been observed both locally and globally this year, quality and better grading will play a critical role on tobacco pricing, stressing that low grade leaf will result in high rejection and low prices.
Malawi is expected to produce 197 million kg of tobacco this year, an increase of 14 percenton the current buyers’ demand of 170 million kg, according to the Second Round Tobacco Production Estimates Survey.
Th e e i g h t b u y i n g companies this season are JTI Leaf (Malawi) Limited, Alliance One Malawi, Limbe Leaf Tobacco Company, Hail and Cotton (Malawi) Limited, Premium Tobacco Limited, Associated Central African Limited, African Tobacco Services and Nyasa Manufacturing Company.
Last season, TC licensed farmers to grow 174.4 million kg, but ended up growing 221 million kg out of 213 million kg demand by the buyers.
The leaf was sold at $2.46 (about K4 307) per kg, raising $540 million (about K944.66 billion) in earnings.
