Tobacco’s cumulative earnings now stand at $85.6 million (K21.4 billion) in the 11 weeks since the market opened in March, sales statistics from Auction Holdings Limited (AHL) have shown.
The leaf’s earnings are boosting foreign currency reserves particularly in the commercial banks making available the much-needed forex to the private sector.
Dollars from tobacco, which wires in 60 percent of Malawi’s total foreign exchange revenue, are being transferred to commercial banks following a directive by the Reserve Bank of Malawi (RBM) on May 7 2012.
The AHLÂ sales report shows that the realised earnings, at an average price of $2.03 (K507.50) per kilogramme from 90 cents (K225) the year before, are from 42.1 million kilogrammes of the leaf.
In the commentary, the tobacco auctioneer says the average price for all types jumped by 0.12 percent to $2.38 per kilogrammes.
“Weekly volumes sold having peaked in week nine continued to drop to 6.9 million kilogrammes in week 11. Rejection rate remained positively low at two percent in week 11, same rate observed in the previous week,†says AHL.
During the period, burley, grown by a majority of smallholder farmers, has raked in $69.9 million (K17.4 billion) out of 36.7 million kilogrammes at an average price of $1.91 (K477.50) per kilogramme.
Flue cured, grown by large estates, has brought in $13.2 million (K33 billion) with 4.3 million kilogramme of the leaf sold at an average price of $3.06 (K765) per kilogramme.
Other types, dark fired and South Division Fire, have contributed about $2.3 million (K576 million) and $146 713 (K36 million), respectively, to the foreign currency reserves.
In an earlier interview, Tobacco Control Commission (TCC) chief executive officer Dr Bruce Munthali attributed the rise in prices to competition and a good working relationship with the buyers.
“Output this year has been low and buyers are scrambling for the leaf resulting in prices going up,†he said.
Tobacco output this year, dropped by 35 percent to 151 million kilogrammes from a record 232 million kilogrammes last year.
The drop has been attributed to the introduction of quotas to match the quantity with the size of the land and dry spell that hit some tobacco growing districts.
