Malawi earned $286.7 million from tobacco this year, but the men and women who grew the crop are starting the new farming season with nothing but debt.
Earnings have crashed by 47 percent from $542 million last year, and the pain has been pushed down to 70 percent of growers who are contracted farmers.
For Kamuyambeni Moyo of Dowa, the country’s forex earner has become a debt trap. He borrowed K2.5 million in inputs, 12 bags of fertiliser, chemicals and plastic sheet to grow one hectare.
He harvested 13 bales, sold everything, and still failed to clear the loan.
“I made profit from just seven bales in 2025. This year, I have sold all the tobacco, but I could not clear my debt, and I have failed to pay the workers. I am starting the new season with a K600 000 debt,” Moyo said.
Moses Chimbalanga of the same district borrowed over K5 million for two hectares. His best bale fetched $1.10, the worst $0.90 per kg. He harvested 18 bales and failed to repay
“I have failed to buy food for my family. I will farm next season just to repay the debt. That is the situation tobacco farming has put me in this year,” he said.
In Mzimba, Happy Dube could not pay his six workers after poor sales and will carry his loan into the next season.
The numbers tell the story of a broken market.
Volume traded fell 35 percent. Average price fell 19.2 percent to $1.98 per kg from $2.45 last year. Rejection rate jumped to 51.2 percent from 27.5 percent.
Data from AHL Tobacco Sales Limited shows the decline in earnings, which means Malawi has lost approximately $256 million (about K443 billion) in potential revenue compared to the previous year, an amount close to the country’s monthly import bill for goods and services.
But one of the tobacco-buying companies, JTI Leaf Malawi, says most farmers it contracted repaid their loans.
The company spokesperson Limbani Kakhome said they provide affordable loan facilities, but acknowledged that a small fraction of farmer groups face challenges in repaying them.
He said of the 8 700 farmers that it contracts, the company achieves almost 99 percent of repayment but admits weather adversities challenge repayments.
“The main factors contributing to non-repayment are adverse weather impacts affecting production, poor crop performance due to crop diseases and, in some cases, side-selling of contracted tobacco by growers. Each case is unique in its circumstances and is treated according to its particular nature of occurrence, guided by the contractual arrangement voluntarily entered into between the grower and the company,” he said.
Kakhome said the contracts are designed in line with tobacco industry regulations and are vetted by both the Tobacco Commission, as the industry regulator and the Competition and Fair Trading Commission (CFTC).
JTI encourages growers who faced repayment challenges to utilise available channels whether directly through JTI, their respective grower associations or the Tobacco Commission, to seek an amicable settlement of their contractual obligations.
Tobacco Commission spokesperson Telephorus Chigwenembe also acknowledged farmers have received low prices during this year’s marketing season.
He said they are helping farmers negotiate better contracts as they prepare for the new farming season.
“We empathise with growers who might have failed to pay off their loans with their contractors for various reasons. We must realise that parties to a contract have obligations and we expect all parties to fulfil their obligations. We vet contracts between buying companies and growers to ensure fairness and transparency, among other issues,” said Chigwenembe.
Economist Milward Tobias says poor performance of the tobacco market has far-reaching implications for the country’s economy.
He believes the problems affecting this year’s market may have originated from last season, when farmers overproduced.
Tobias observes that buyers may have been compelled to purchase tobacco against this year’s quota, contributing to the poor performance of the current marketing season.
He has urged the Tobacco Commission to tighten the issuance of production quotas to control output and protect farmers from low prices.
Tobias has also cautioned farmers to adhere to the production limits.
“The situation is sad. Tobacco farming involves many farmers, most of them smallholders. Income from tobacco benefits many people. It is more than a foreign exchange earner. It is income flowing into several pockets, giving farmers and their families a livelihood,” he said.
Tobias noted that it also has a strong value chain with many actors, including graders, transporters and banks.
“When sales and incomes decline, it means livelihoods are disrupted for many people, and the entire economy experiences a slump,” he said.
Mzuzu University economist Christopher Mbukwa said the poor performance shows Malawi must find alternatives, but warned the alternative markets are dead.
“It is unreasonable to continue relying on tobacco. But it survives because it has a structured market. Admarc is non-functional, so we will continue to suffer forex shortages and our farmers will continue to carry over loans,” Mbukwa said.
The loss of confidence is already showing. Only 55 851 growers out of an estimated 293, 205 had registered by the extended deadline of October 17, just 19 percent.
Tobacco contributes 12 to 15 percent to GDP and over 50 percent of forex.
