Tobacco has generated $206.5 million (about K361.5 billion) revenue in nine weeks, representing more than half of last year’s total proceeds, but less than what the country earned during the same period last year, a market report shows.
An AHL Tobacco Sales Limited report for the week ending June 6 indicates that the revenue has come from 83.6 million kilogrammes (kg) of tobacco sold at an average price of $2.47 (about K4 324) per kg.
During the same period last year, the report shows that Malawi earned $258.2 million (about K452 billion) out of 89.8 million kg sold at an average price of $2.87 (about K5 025) per kg.
For instance, market records show that in week six, 44.7 million kg of tobacco had been sold, which means that the volumes almost doubled in three weeks to hit 83.6 million kg at the end of last week.
Tobacco Commission (TC) spokesperson Telephorus Chigwenembe said in an interview on Saturday that the average price has been improving in \weeks, a development that could have a positive effect on the revenues.
In week six, the average price improved from $2.36 (about K4 132) per kg to $2.40 (about K4 202) per kg before further increasing to $2.43 (about K4 254), $2.45 (about K4 289) and $2.47 (about K4 324) in weeks seven, eight and nine in that order.
In a separate interview on Saturday, Tama Farmers Trust chief executive officer Nixon Lita described the improvement in prices as positive and attributed it to good quality tobacco farmers are taking to the market.
He said: “It is a good development to see that the average price has gone up. We expect to see more of such increases as we are getting less of the bottom leaf and moving to the upper leaves as the season progresses.”
Meanwhile, Ministry of Agriculture controller of agriculture extension services Alfred Mwenifumbo said looking ahead, the government through the tobacco regulatory body wants to focus on value-addition and increased productivity to enable the country realise more from the crop.
Among others, he said the TC five-year strategic plan targets to grow the tobacco industry by promoting large-scale farmers and modern technology to increase output, improve quality and achieve value-addition.
Said Mwenifumbo: “For example, in the past, the industry was a monopoly of smallholder farmers, farmers with land holding of less than one hectare or two hectares.
“We are now talking of inviting mega farms, that is farmers owning more than 20 hectares all the way to 100 hectares. We are hopeful that by 2030 there will be more large-scale farmers and the industry will grow.”
He said by promoting mega farms, the strategy wants to enhance the use of modern technology in tobacco production to improve the quality, which could address persistent low prices.
Last season, Malawi earned $396 million (about K693 billion) from tobacco, a jump from $282.6 million (about K494 billion) in 2023.
This year, the country is expected to produce 174 million kg, lower than the buyers’ demand of 213 million kg.
Tobacco contributes more than 50 percent to the country’s foreign exchange earnings and 13 percent to the gross domestic product.
