Farmers, economy to feel pinch of poor tobacco sales

As the tobacco marketing season nears its closure at the end of this month, industry players warn that the economy stands to feel the impact of poor prices and high rejection rates that characterised the market this year.

They warn that the country might actually miss the projected revenue for tobacco this year.

“Poor prices and high rejection rates will have a negative impact on the overall performance of the market. The effects of poor sales will be felt across all sectors because tobacco is the economies main player,” one expert said yesterday.

His comments come at a time the dream to bank $350 million from tobacco looks far fetched with current figures from Tobacco Control Commission (TCC) showing in the 18th week Malawi tobacco has generated $283.5 million from 158.8 million kilogrammes (kgs) compared to $290.5 million sold last year during the same period after selling 153.8 million kg.

Last year, the country earned $362 million from 168 million kg of tobacco, a similar value was earned in 2013 while in 2012 the country raised $177 million, which was lower than the $292 million earned in 2011.

Tobacco grower Amos Banda yesterday described this year’s tobacco selling season as one of the worst in recent years for flue-cured tobacco growers because of high rejection rates.

“What this means is that next year we will not grow flue-cured tobacco, we will grow burley because it has a market. We should expect overproduction of burley next year,” Banda said.

Tobacco Association of Malawi (Tama) chief executive officer Graham Kunimba in an interview said farmers have this year felt the pinch of low prices and high rejection rates of tobacco the auction system.

Said Kunimba: “It is every grower’s wish and expectation not only to sale their products, but at a responsible price too. Sadly, the market was engulfed with high rejection rates and low prices, which has been a major blow to farmers.

“This year’s prices have been lower than those of last year, a worrisome development to farmers.”

Bruce Munthali, TCC chief executive officer, admitted yesterday that the tobacco market has among other challenges been elongated due to high rejection rates and suspension of sales in some auctions.

“The leaf quality too has been affected due to the prolonged market,” Munthali noted.

He sympathised with the farmer as they had to wait for many months to have their tobacco sold.