Earnings from tobacco, the country’s main foreign exchange earner, are expected to decline by 43 percent this year to about $300 million (about K537 billion).
During the 2025 Tobacco Marketing Season, tobacco fetched $542 million (about K949 billion) due to low output and poor prices.
The projection, according to data from AHL Tobacco Sales Limited, comes at a time the country has sold 140.7 million kilogrammes (kg) of the leaf, which is 91 percent of the 154.9 million kg estimated total output as prices continue to tumble at a time the tobacco marketing season is about to close.
This means that Malawi will miss out on about $210 million (about K400 billion) potential revenue from tobacco compared to last year, which is slightly close to the country’s monthly requirement to import goods and services.
Malawi’s monthly import figure, according to the Reserve Bank of Malawi, stands at $250 million (about K438 billion).
AHL Tobacco Sales Limited data show that the industry’s dismal performance is attributed to low output and poor prices this year.
The report for week 18 shows that total sales revenues for all types of tobacco amounted to $278 million (about K486 million) compared to $482 million (about K844 billion) during the same period last year, representing a decline of 42.9 percent.
Reads the report in part: “The national average price for all tobacco types dropped by 21.7 percent from $2.54 [about K4 447] per kg recorded at the same period in the 2025 season to $1.99 [about K3 484] kg this year.
“This reflects a subdued buyer demand and lower prices this year compared to the 2025 season.”
In an interview on Friday, Tama Farmers Trust president Abiel Kalima Banda described this year’s tobacco season as disappointing to growers, saying prices continue to decline even after knowing that the 154.9 million kg output is below the buyers’ demand pegged at 170 million kg.
He said: “It has not been a good year. The average price of $2 [about K3 502] per kg and below does not reflect the cost of production and is demotivating to farmers.
“Initially, we were meant to believe that prices were affected by overproduction which was not the case.”
The Tobacco Commission (TC) Second Round Estimates Survey projected output at about 197 million kg and thereafter dropped to 154.9 million kg during the Third Round Tobacco Production Estimates Survey done in June.
TC spokesperson Telephorus Chigwenembe, in an interview on Friday, attributed the drop in tobacco output to diseases, heavy rains and post-harvest losses, whose impact deteriorated well after the second round estimates were released.
He said the tobacco bushy-top disease, which was observed at a later stage of the growing season coupled with heavy rains that led to leaching in some areas and notable post-harvest losses in the Northern Region, had a bearing on the final output.
“Important to note is the fact that the factors that have led to the reduced production projection emerged or worsened after we had already conducted the second round of crop estimates survey that gave us the 197 million kg projection,” he said.
This season, the number of tobacco buyers dropped to eight from 11 last season.
The firms are JTI Leaf (Malawi) Limited, Alliance One Malawi, Limbe Leaf Tobacco, Hail and Cotton (Malawi), Premium Tobacco, Associated Central African, African Tobacco Services and Nyasa Manufacturing.
Last season, farmers produced about 221 million kg of tobacco against licensed volumes of about 174.4 million kg with demand pegged at aboutg 213 million kg.
The crop generated a record $542 million (about K949 billion) at an average price of $2.46 (about K4 307) per kg.
Tobacco remains Malawi’s main foreign exchange earner, contributing about 50 percent to forex earnings, 15 percent to the national economy and the industry employs millions of people along its value chain.
