The Tobacco Commission (TC) says it has licensed a new tobacco buying company, Eastbridge, a move it says hopes will bring competition on the market.
The commission said this in a statement on Friday as the season is set to open on April 9 2025 at Kanengo Floors in Lilongwe followed by Chinkhoma in Kasungu, Limbe in Blantyre and Mzuzu on 11, 14 and 28 April in that order.
Reads part of the statement: “Tobacco Commission has licensed 11 companies to buy tobacco in the 2024/25 selling season. Among the 11 is a new company, Eastbridge.
“The others are Nyasa Manufacturing Company, Limbe Leaf Tobacco Company, JTI Leaf Malawi, Voedsel, Alliance One, Hail and Cotton, Premium Tobacco Malawi Limited, African Tobacco Services, Associated Central African Limited and Watergen.”
Last year, there were 10 buying companies, according to TC spokesperson Telephorus Chigwenembe, who said the additional buyer will bring further competition.
“With 11 buying companies, the commission expects healthy competition for tobacco and an exciting selling season,” he said.
In a separate interview, Tama Farmers Trust chief executive officer Nixon Lita said the commission is yet to communicate to the industry formally on the developments
“They are yet to communicate to industry, otherwise the ones last time listed failed to participate on the market. May be on Monday [today] they will release the list of buyers, including the new ones. Even buying prices are not officially out,” he said.
But Chigwenembe was optimistic that all 11 buyers will actively participate on the market this year.
“We are hopeful that all the 11 companies will buy the tobacco,” he said.
Chigwenembe said the commission expects better prices this year considering that the demand, at 213 million kilogrammes (kg), is 22 percent higher than supply projected at 174 million kg.
On the opening of the season, Lita said it is a relief to farmers who could reap from their investment.
In a separate interview, financial expert Brian Kampanje said the opening of the tobacco market should bring relief to the scarcity of forex and assist the country pay some of its backlog import bills, including inorganic fertilizers and fuel.
He said: “The foreign currency exchange rates are likely to be stable and perhaps appreciate against the major trading currencies between April and July 2025 during the tobacco marketing season. This could improve the import cover and suppress the parallel market exchange rates.”
First-round tobacco production estimates show that 174.4 million kg will be produced, representing a 31 percent increase from last season’s 133 million kg.
Last season, the country raked in $396.9 million (about K694.9 billion) from the leaf sold at an average price of $2.98 (K5 217) per kg, an increase from the previous season’s $282.1 million (K494 billion) at average price of $2.14 (about K3 747) per kg.
In 2021/2022 season, the country earned $197 million (about K344.9 billion) at an average price of $1.59 (about K2 784) per kg while in 2020/21 season, the country realised $195 million (about K341.4 billion) at an average price of $1.60 (about K2 801) per kg.
