Malawi over produced tobacco by 14 million kgs in 2014
Malawi’s tobacco production in 2014 has been estimated at 182.5 million kilogrammes, a figure which represents an eight percent increase over last year’s production, Business News has calculated.
Last year, the country sold 168.6 million kilogrammes compared to 80 million kilogrammes sold in 2012 which means that tobacco production this year has swollen by 13.9 million kilogrammes.
TCC chief executive officer Bruce Munthali confirmed the 182 460 000 figure to Business News in an interview at Chinkhoma Auction Floors in Kasungu on Tuesday on the sidelines of a visit by Minister of Agriculture, Irrigation and Water Development Allan Chiyembekeza.
Munthali said such a final round tobacco estimate this year represents a six percent decrease from the second round estimates that the commission conducted earlier during the year.
He said the decrease is largely due to weather related factors, more especially the excessive rains which occurred in February and March, 2014.
Said Munthali: “Nonetheless, the volumes are much higher than in 2012 and 2013 tobacco season. It is a source of comfort for us the tobacco industry.”
However, Business News understands that the over-supply of tobacco at the auction floors has not gone well with most tobacco growers as they have seen prices for their tobacco being depressed as market forces of demand and supply reign in.
Chiyembekeza, in a separate interview, also attributed this year’s low tobacco prices to over-production of the crop coupled with poor quality leaf from growers in some instances.
“Well prices are still low according to the farmers, I think because production hasn’t been taken care of in terms of quality and also quantity. Quality generally is not all good and there has been an increase in production and normally when you over produce, prices become low,” admitted the minister.
He said government is therefore, encouraging growers to take proper care of their tobacco when grading in order to deliver good quality tobacco at the auction.
Chiyembekeza said government will also intensify ways of controlling production to avoid depressed tobacco prices in the subsequent marketing seasons.
“So we are in discussions with producers and the buyers to see if we can improve the whole system,” said Chiyembekeza.
He said if tobacco prices remain low at the floors, growers usually struggle to repay their loans hence need for improvement in the quality of tobacco for growers to be able to repay their respective loans using their tobacco proceeds.
Malawi earned $361.7 million from tobacco crop last year, a figure which represented 103 percent increase over the 2012 earnings estimated at $178 million.
In terms of average pricing, the final average price last year marginally declined to $2.14 from an average price of $2.22 in 2012, representing a 4 percent decrease.
