Tobacco growers anticipate better prices
Tobacco growers in Central Region say they anticipate improved prices at the country’s auction floors in the aftermath of the May 20 Tripartite Elections.
Speaking in an interview with Business News on Wednesday, President for the Central Region Tobacco Growers Association (CRTGA) Ernest Chadzunda said now that the election euphoria, coupled with the political impasse, has subsided, it is time buyers jacked-up prices for tobacco at all auction floors and satellite depots.
For the past 10 weeks of the 2014 tobacco marketing season-which commenced on March 24, national weighted tobacco prices for both burley, flue-cured, and dark-fired varieties have remained low as compared to the same period last year, a development which continues to displease growers as their profit margins shrink.
According to Tobacco Control Commission (TCC) official statistic Business News has seen this week, national average tobacco price for the past 10 weeks of trading was $1.61, which is lower than the average price of $1.85 during the same period last year.
“Now that election has gone, as tobacco growers we expect better prices on the market since there is political certainty now. Prices have been that all better for the past weeks the market has been in progress,” said Chadzunda in Lilongwe.
He said the association was also pleased to see market stability for the past 10 weeks as compared to last year when the market was riddled with regular disruptions over disagreements between buyers and growers over prices.
Added Chadzunda: “If prices improve, our growers will be able to repay their respective loans with ease and also finance for inputs for next year’s farming.”
Commenting on the movement of the Kwacha, Chadzunda said it was pleasing to see that the currency has stabilised for almost a month at around K381 to the United State dollar which he said is good to growers.
He warned that any likely appreciation of the currency would be detrimental to growers as their earnings would be depressed.
Speaking in a separate on Tuesday, the Tobacco Association of Malawi (Tama) chief executive officer Graham Kunimba also cited low prices at the auction floors as compared to last year as the most pressing challenge facing tobacco growers.
Kunimba noted that there is a persisting gap between this year’s average prices and those of the same period last year of about 20 cents which he said is significant to impact on growers’ total earnings.
Last year, Malawi earned $362 million at auction floors level from tobacco, a figure which was almost double than the $177 million realized in 2012 marketing season.
