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Suspended flue cured sales to affect forex earnings

Suspended auction flue cured tobacco sales that had not yet resumed by Tuesday will affect the country’s forex earnings, the Tobacco Association of Malawi (Tama) has said.

In a telephone interview on Tuesday, Tama chief executive officer Graham Kunimba described the situation as sad adding that it is unfair to farmers.

Suspended flue cured sales will affect farmers
Suspended flue cured sales will affect farmers

“The farmers innocently produced the leaf for the market hoping that it will be bought. This suspension will affect their livelihoods and the quality of the leaf will be compromised due to the suspension. The country will also lose out on forex if these farmers start smuggling the leaf to neighbouring countries. We will also lose out on levies,” said Kunimba.

He, however, added that they will keep talking to the Tobacco Control Commission (TCC) and buyers to resume the auction market.

TCC chief executive officer Bruce Munthali in an interview on Tuesday said he would be able to comment later because he was driving.

Auction flue cured tobacco sales have been suspended for the past three weeks with TCC attributing it to high rejection and poor prices of the leaf.

However, according to an earlier statement the sales were slated to resume this week.

Earlier Kunimba said auction prices for flue cured tobacco just before the suspension averaged $1.65 per kg compared to $2.65 per kg last year while contract prices for the leaf averaged $2.14 per kg compared to $2.63 per kg.

To date, about 72 million kilogrammes of tobacco have been sold and has raked in $116.76 million at an average $1.62 per kilogramme. So far burley has fetched $107.3 million from 67.8 million kilogrammes at an average $1.58 per kg.

Flue cured has raked in $8.9 million from four million kilogrammes of flue cured tobacco.

During the week prices surged by an average three percent with dark fired achieving a six percent increase.

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.

According to statistics provided by the Auction Holdings Limited (AHL), overall tobacco average prices continued to rise since start of season with burley averages rising by four percent in week 10.

AHL also indicated that current dark fired volumes and average prices are below figures achieved last season after same period sales last season largely as a result of reduced number of active buyers on the dark fired tobacco market.

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