Tobacco chalks K2.4bn, as LL growers weep

Tobacco market, which opened last week Monday, has raked $5. 8 million (about K2.4 billion) in the first week of trading, a figure which is 92 percent higher than $3 million (about K1.1 billion) realised in the first week last year.

According to a market update compiled by the Tobacco Control Commission (TCC), 5.1 million kilogrammes (kg) of burley tobacco was sold against 2.4 million kg sold during the same period last year, representing a 112 percent jump.

On average pricing, the TCC update shows that during the first week, tobacco has been sold at an average price of $1.14 per kg against an average price of $1.26 per kg, representing a nine percent drop.

However, there is a difference in the prices of burley tobacco sold on contract and auction as the summary shows that in the first week, the average price of burley on auction was $1. 09 per kg while that of contract was $1.20 per kg.

But Central Region Tobacco Growers Association (CRTGA) president Ernest Chadzunda yesterday expressed discontent, saying the first week,  was characterised by ‘bottom rock’ prices.

He said it was sad that buyers are sticking to minimum prices and not adding a mark-up on the prices which he said is frustrating.

“Prices have not been good in the first week and have stagnated. Growers are not smiling anymore. We urge buyers to desist sticking to minimum prices which is not helping matters at all,” said Chadzunda.

He , however, expressed hope that as the market progresses, quality tobacco will be coming at all the auction floors which he said should improve prices for growers to benefit.

The association also dispelled statements by tobacco authorities this week that tobacco market in the first week had stabilised, saying stability would be realised as we enter April.

On Wednesday last week, growers disrupted the market at Limbe Auction Floors, angered by low prices the buyers were offering.

Tobacco players generally agree that the first days of the market are filled up with tobacco from vendors who hope to cash in on good prices despite their leaf not being properly graded.

The government set minimum prices for both contract and auction have this year been set at $1.76 per kg from last year’s $1.69 per kg for burley, $2.65 per kg from $2.63 per kg for flue and $2.10 per kg from $1.80 per kg for dark fired tobacco.