Low prices force Malawi flue cured tobacco market suspension
Auction sales market for Malawi flue cured tobacco has been suspended due to low prices which the Tobacco Association of Malawi (Tama) has said are lower than last year’s.
Tama chief executive officer Graham Kunimba in a telephone interview on Tuesday said that they had intervened and involved the Minister of Agriculture and Food Security to suspend the auction sales of the flue cured tobacco which were poorer than last year’s and the leaf’s prices on the contract market.
And at the start of the season this year, irate tobacco growers halted sales of tobacco at Limbe Auction Floors due to below minimum prices buyers were offering.
According to Kunimba, auction prices for flue cured tobacco just before the suspension averaged $1.65 per kg compared to $2.65 per kg last year. He further said that contract prices for flue cured tobacco averaged $2.14 per kg compared to $2.63 per kg.
“When you are in business you expect an increase in prices and not a fall. We would love to see the prices of the flue cured tobacco on the auction floors improve. We have so far been in discussion with stakeholders and we hope that the sales
will resume soon,” said Kunimba adding that the actual date of resumption will be announced by the Tobacco Control Commission (TCC).
However, TCC chief executive officer Bruce Munthali who was reported out of the country could not pick his phone.
So far, according to available figures, about 45.89 million kilogrammes (kgs) of tobacco have been sold fetching about $68.03 million at an average price of $1.48.
Out of this 1.7 million kilogrammes of flue cured tobacco have been sold fetching about $3.65 million at an average price of 2.12 per kg.
Last year Malawi total sales of tobacco amounted to 168.67 million kilogrammes and raked in at total $361.84 million at an average $2.15 per kg.
Out of the total flue cured tobacco sales hit 19.75 million kilogrammes with revenue of about $61 million at an average price of $3.10 per kg.
Earlier Munthali indicated that the country expected to produce 167 million kilogrammes of burley tobacco, 21 million kilogrammes of flue cured and three million kilogrammes of dark fired tobacco.
The TCC chief said demand for burley is expected to range between 150 and 160 million kilogrammes, slightly below the projected production for the leaf, however demand for the other tobacco types corresponds with production.
