Tobacco has generated $31.9 million (about K55.8 billion) in three weeks, with the Tobacco Commission (TC) hoping for a better season amid improved flows of the leaf to the market.
According to TC market update, the revenue has been realised from the sale of 14 million kilogrammes (kg) of tobacco at an average price of $2.28 per kg although.
However, this is below $53.7 million (about K94 billion) generated from the sale of 20.1 million kg at an average price $2.67 per kg last year.
In an interview, TC spokesperson Telephorus Chigwenembe said the market is progressing well with improved flow of tobacco starting in the third week which could impact positively on the length of the season.
He said: “The growth in volumes at the floors is a pleasant development as this will help us make full use of resources available.
“What we are seeing is a very good development. We are talking about space, personnel and time. We would like to make the period of the market as reasonable as possible.”
Chigwenembe’s remarks come after the markets experienced some challenges with farmers protesting low prices in various auction floors.
Tama Farmers Trust president Abiel Kalima-Banda, speaking after monitoring sales at Lilongwe Floors in Kanengo where most of the leaf was bought below $2 (about K3 502) per kg, said low-grade leaf is fetching lower prices compared to last season.
He said if the situation continues, most farmers will not make meaningful earnings to pay back loans and buy inputs for the next growing season.
Said Kalima Banda: “I have seen most bales going at $1.20 (about K2 101) per kg. Last season same period there were not less than $2 prices offered for similar grades and personally I do not understand.
“The highest price I have seen is $3.20 (about K5 603) per kg and even the few bales that attracted this price were facing bargains.”
He pleaded with the government through the commission to engage the buyers to offer better prices to meet the rising cost of production occasioned by rising cost of inputs such as fertiliser and chemicals.
In a brief response, Tama Farmers Trust chief executive officer Nixon Lita said they will review the situation to chart the way forward.
He said: “So far, we have had no protests since the Chinkhoma Auction Floors last week. So far, prices are good, all grades are being bought at above the set minimum prices. Higher quality leaf is being rewarded more than lower quality.”
Earlier, Chigwenembe said in a statement that there is no standard minimum price for the country’s tobacco as each grade has its own minimum.
He said: “In Malawi, there are 52 grades for burley tobacco; 99 for flue-cured and virginia and 48 grades for dark-fired tobacco. A minimum price is set for each of these grades. This means there are 199 minimum prices of Malawi tobacco.”
Last season, Malawi earned $396 million (about K693 billion) after selling 133 million kg of tobacco at an average price of $2.98 (about K5 217) per kg.
