TC downplays impact of market suspension

Tobacco Commission (TC) on Wednesday suspended selling of tobacco in all its markets across the country owing to security concerns in view of the  planned demonstrations which were later cancelled.

TC corporate planning and development manager Hellings Nasoni said in an interview on Tuesday the suspension of the market was based on advice from security agents.

Tobacco revenue is expected to go down this year

He acknowledged that the TC has previously been trading while demonstrations are in progress and never suspended the tobacco markets.

Nasoni said the impact of the closure was minimal as it was only for a day and trading resumed yesterday.

He said: “One would assume that volumes uptake and revenue was affected just like in any other trading. When you miss a day, it means that you would not realiSe intended outcomes. We, however, have systems and strategies to mitigate such kind of developments.

“We wouldn’t be able to give a figure in terms of volumes and revenue that we missed for not selling in one day because volumes sold on the market vary. Sometimes we may give a figure which may appear misleading because it all hinges on market technicalities and logistical issues that necessitate the marketing of tobacco.”

Nasoni said specific dates of closing the market will be communicated in due course once the market trends are analysed.

He said the rejection rate has gone down from about 70 percent when the market opened to between 20 and 25 percent.

Tobacco Association of Malawi (Tama) chief executive officer Felix Thole said the suspension as a blow to farmers.

He said: “The immediate implication is that it would contribute to the delays of tobacco marketing and also it implies that instead of a farmer getting his income and start using the money, there will be that delay.

“There have been challenges on the market. As you know, we started on a very slow note as the industry was trying to adapt to the guidelines in the new Tobacco Industry Act. So, as we were settling down to be compatible with the Act, there were some delays.”

Thole lamented the continued low prices offered by buyers, especially on the auction market compared to the contract market.

So far, the market has sold 143 million kilogramme )(kg) as at week 18 of the marketing season compared to 171 million during the same period last year, representing a 16 percent decline.

In terms of revenue, tobacco has raked in $211 million (about K156 billion) compared to $296 million (about K219 billion) during the same period last year, representing 29 percent drop. Currently, the leaf is being bought at an average price of $1.47 (K1 087) per kg compared to $1.73 (about K1 280) per kg during the same period last, which  is a 15 percent price decline.

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