Poor tobacco auction sales worry growers
Big Tobacco Growers Association (Central Region) has called on government to intervene in the sales of flue-cured tobacco under auction marketing system which has been suspended for four weeks in some auction floors while Lilongwe Auction Floor has had two sales.
Chairperson of the association Henry Ntaba said in an interview that government should look into the plight of tobacco growers both on contract and auction.
Ntaba, who classified this marketing season as bad for tobacco growers, said what is happening is a deliberate intention by buyers to penalise growers.
“This is not fair at all. We are not supported as tobacco growers and the sad part is that tobacco is not maize that we can store for another marketing season,” Ntaba said.
He said the buyers are only buying the leaf on contract to recover their loans.
“As a big grower, I have lost considerably on auction system and I am actually thinking of going into contract with a buying company next growing season as I am now desperate,” Ntaba said.
Auction Holdings Limited (AHL) Group corporate affairs manager Mark Ndipita said the sales are not progressing well as the rejection rate was still high at 80 percent during last Friday sales.
“Lilongwe floors has had one sale in two weeks after suspension because buyers that purchase flue cured tobacco are the same; so they move to all the floors and because of this the next sale for flue cured tobacco at Lilongwe Floors is this coming Friday [yesterday],” Ndipita said.
On his part, Tobacco Control Commission (TCC) chief executive officer Bruce Munthali said plans are underway to resume sales in all floors although Lilongwe Auction Floors has had [two] sales two weeks after the suspension to clear off some stocks as it had 1 700 bales.
He said it is not possible to have sales without buyers, therefore, the sales were suspended to mobilise buyers.
Munthali said at the moment there are only four buyers for the auctioned crop, namely Limbe Leaf Tobacco, Alliance One Tobacco Malawi Limited, Malawi Leaf and Vision Tobacco International.
He said currently, there are two ways to deal with the challenges which are to produce in line with demand, and to secure more buyers to buy the uncommitted crop.
Munthali said while it is a challenge to sell flue cured tobacco under auction this marketing season, TCC has been encouraging small companies to participate in buying the crop.
He, however, tipped farmers to grow according to demand and align themselves to buying companies.
“Growing without a market is not good, these are some of the challenges that come with it,” he said.
He attributed the high rejection rate to global over supply of the leaf.
“Even China, which prefers flue cured tobacco, is sitting on large stocks,” he said.
Munthali added that there is need for intensive civic education for farmers to grow the crop according to demand.
While the farmers are seeing a bleak future on tobacco sold under the auction system, Ndipita is on record as having said the future is bright because of government policy that auction selling should be done side by side with tobacco sold under contract system.
