Despite the Tobacco Commission’s (TC) extension of its marketing season, Mzuzu Floors still holds over four million kilogrammes (kg) of unsold leaf while additional volumes are stuck in farmers’ homes, The Nation has learnt.
A source privy to data at Mzuzu Floors confirmed in an interview yesterday that four million kg remain unsold, adding that while the market is still open, daily sales volumes are too low to make a dent on the outstanding stock.
TC and Tama Farmers Trust, on the other hand, while confirming that there is unsold tobacco both on the floors and outside formal markets, could not give official figures, with the commission saying assessments are ongoing.
The unsold four million kg alone—based on the average price of $2.46 (about K4 307) per kg for the season—translates to $9.84 million (about K17.2 billion) excluding tobacco outside the floors.
Farmers we talked to said they are suffering because buyers are reluctant to buy their tobacco and the few who get it do so at “very low prices”.
Speaking in an interview, Chitipa-based Kwacha na Kulya Club chairperson Hazwell Chikakuda, whose registration number is 911765M, said they last sold tobacco in July and since then, the 10-member club is stuck with 103 bales or 10 300 kg of unsold tobacco because buyers reneged on contracts.
He said: “We are in deep pain and the situation is worse. We sold very little and after offsetting the K4.475 million loan, buyers terminated the contracts, leaving us in shambles. We are failing to pay workers. We can’t buy food or pay fees for our children.”
Chikakuda said tobacco, touted as the country’s main foreign exchange earner, needs capital, but they are getting into the 2025/26 season without working capital.
He said: “The prices were even worse this year. What will we do with the tobacco left? Do we have to keep it until next year? Will it not have lost weight?”
Another farmer from Rumphi District, Jai Kanyondo, said from the K3 million loan he obtained, he has repaid K2.7 million, but much of the leaf is not from contract sales.
He said: “Imagine, on the floors, there are 12 bales left, which is about 1 500 kg. After the buyer terminated the contracts, I started making general sales on the floors just to repay the loan and I am remaining with K 300 000.
“The prices were bad, I sold my eight bales at $2.40 [about K4 202] per kg, but mostly these days, they are buying at less than $2 (about K3 502) per kg. Look at the investment and what we are getting. We need authorities to intervene on this, otherwise, farmers are suffering.”
Kanyondo said they were seeking legal advice on how to proceed with companies that have abdicated from their responsibility of buying the leaf as per contractual agreements.
In an interview, Tama Farmers Trust chief executive officer Nixon Lita admitted the matter was complicated and farmers needed help.
He said: “We have an oversupplied market versus demand. Government, through TC, is in discussions with stakeholders and they will soon guide on the way forward.
“Stocks are still high [for Mzuzu], but throughput is low [flow rate of buying].”
Limbe Floors closed on August 8 while Lilongwe and Chinkhoma floors in Kasungu closed on October 8. Sales at Mzuzu Floors continue, but with farmers complaining over the prices offered and the volumes being sold.
TC spokesperson Telephorous Chigwenembe said they are aware that there are volumes of tobacco both within the selling floors and outside.
However, he said there is need for a special assessment to see how much is unsold, adding that some farmers who have contracts with companies have been heavily affected.
“Some contracting companies have not yet bought the crop. So, we are engaging stakeholders, including the companies, to see the way forward. We will wait to see the outcome of the engagements we are having with stakeholders,” he said.
TC data shows that as of Monday this week, 218.9 million kg has been sold at an average price of $2.46 per kg, raising $539.4 million (about K944.66 billion).
Initially, the crop production estimate survey indicated that the country would produce 174.4 million kg of tobacco, but later the Ministry of Agriculture said production increased due to improved weather conditions towards the end of the growing season.
Last season, Malawi earned $396 million (about K693 billion) after selling 133 million kg of tobacco at an average price of $2.98 (about K5 217) per kg.
Tobacco remains Malawi’s main export crop, contributing more than 50 percent to the country’s foreign exchange earnings and 13 percent to the economy.
