Tobacco farmers smiled all the way to the bank

The tobacco industry had its fair share of gains this year as the country’s number one foreign exchange earner’s revenue increased by 56 percent while the average price rose by 10 percent from last year.

This is, however, despite the season being marred by growers’ inconsistent tobacco grading and illegal vending of the crop.

During the year under review, Malawi raked in $282.6 million (about K480.4 billion) from 120 million kilogrammes (kg) of tobacco at an average price of $2.35 (about K4 000) per kg.

In an interview, Tama Farmers Trust chief executive officer Nixon Lita said year 2023 was a good for tobacco farmers following increased production and higher prices.

He said while the rise in commodity prices has not spared farm inputs and basic daily needs of the farmer for survival and development, the future for tobacco is bright.

Said Lita: “There’s an expectation that the 2024 market might record prices above the 2023 levels mainly due to projected lower than expected global supply.

“There’s an increased global demand for the leaf, and that is creating a chance for our growers to make business.”

He said what tobacco farmers need is to follow  recommendations to respond to issues raised from the market, such as environmental protection and respect for workers’ human rights.

“As we speak, tobacco production and trading is legal under international laws,” he said.

In August this year, Malawi signed the World Health Organisation Framework Conventionon Tobacco Control, making the country the 183rd party to be party to the treaty which World Health Assemly adopted in May 2023.

The signing of the treaty had put Malawi under scrutiny by the global framework for tobacco regulation, requiring the country to implement policies and measures to control tobacco use, protect public health and reduce the negative impacts of tobacco production and consumption.

Speaking separately, Tobacco Commission spokesperson Telephorus Chigwenembe said Malawi’s tobacco has a good future whose key is compliance with environmental, social and governance standards.

He said when you look at the performance of the industry in recent years, 2023 was the best.

Said Chigwenembe: “The excitement on the buying side, especially towards the end of the selling season, was a positive development for growers.

“Competition was good and this resulted in better prices than in previous years. We are also excited that Parliament passed a new tobacco law which will help promote production that complies with international standards. This will ultimately make Malawi tobacco even more attractive, which is good for the country.”

He said the commission is presently consolidating figures from buyers to determine this year’s trade demand.

This year, Malawi’s tobacco suffered a 50 million kg supply deficit which deprived the country of about $115 million (K195 billion) in potential foreign exchange earnings.

The country only supplied 120 million kg against a demand of 170 million kg.

Tobacco remains a key cash crop in Malawi, contributing about 60 percent to foreign exchange earnings, 15 percent to the economy while the sector directly and indirectly employs millions of people.