The preliminary demand for tobacco from buyers in the 2025/26 selling season stands at 170 million kilogrammes (kg), a 25 percent drop from last year’s 213 million kg.
This comes when the number of buying companies is also projected to drop from 11 last season to eight this year, a situation analysts fear could dumpen prices if more buyers do not join the market.
In an interview yesterday, Tobacco Commisson (TC) spokesperson Telephorus Chigwenembe confirmed the figures, saying the commission is still luring other buyers.
He said: “The preliminary demand is at 170 million kilogrammes. This is from eight companies.
“Luring new buyers is an ongoing effort. So, whenever we have new buyers on board, we will announce.”
Meanwhile, according to Chigwenembe, the commission has licensed volumes of up to 242.5 million kg of tobacco, which is 42.6 percent higher than the current preliminary demand from the buyers.
However, he did not disclose the three buying companies that have not yet been licenced out of last year’s 11 registred companies. Last year’s licensed companies included: Eastbridge, Nyasa Manufacturing Company, Limbe Leaf Tobacco Company, JTI Leaf Malawi, Voetsel, Alliance One, Hail and Cotton, Premium Tobacco Malawi Limited, African Tobacco Services Associated Central African Limited and Watergen.
With the country producing 221.2 million kg of tobacco last year which it sold at $542.3 million (K949.5 billion) at an average price of $2.45 (K4 289) per kg, the increasing supply with declining demand is worrisome to analysts.
In an interview, agricultural extension services expert Leonard Chimwaza expressed fear that the falling demand could dampen prices as supply is likely to be high with 242.5 million kg registered volumes.
He said: “This is unfortunate. The tricky part is when demand decreases prices may fall and that is not good for the industry.
“Weaker prices result in increasing cases of smuggling. Let’s hope the other companies will come on board to strengthen competition.”
In a separate interview, Tama Farmers Trust president Abiel Kalima Banda said the licensing can be used to control production and supply to avoid issues of overproduction which prolongs the market.
He said: “The licencing issue is handled by TC. But as Tama Farmers Trust, we believe this is the critical stage where production can be controlled to avoid what happened last year where the season was prolonged until October.
Meanwhile, the commission has not yet conducted production estimates survey despite licensing 242.5 million kg and past trends shows that output remained below demand.
While the commission licensed farmers to grow 174.4 million kg and ended up growing 221 million kg (out of 213 million kg demand) in 2024/25 season, in most cases growth failed to meet the demand since 2020.
For instance, in 2023/24 season, the regulator licensed farmers to grow 265.9 million kg of the leaf, but farmers ended up producing 133 million kg, which was below the 190 million kg buyers’ demand.
In 2022/23 season, TC licensed farmers to produce 172 million kg, but farmers produced 85 million kg while the demand was at 140 million kg.
Similarly, in 2021/2022, season, the tobacco regulator licensed farmers to grow 162.8 million kg against 140 million kg demand, but the output was recorded at 123.6 million kg while in 2020/2021 season, the regulator licensed about 150 million kg out of the demanded 132 million kg, but the output was 114 million kg.
