Tobacco market closes, revenue up 58% to k247bn

 

The tobacco marketing season has ended after 25 weeks of sales, with the leaf’s earnings rising by 58 percent to $337.3 million (about K247 billion), largely buoyed by increased volumes.

The earnings from tobacco, the country’s major foreign exchange earner, has jumped from last year’s $212.5 million (about K155 billion), according to figures from the Tobacco Control Commission (TCC).

This is despite the average price dropping by 16.1 percent to an average of $1.67 (K1 224) per kilogramme (from last year’s $1.99 (K1 458) per kg adue to oversupply.

Mutharika appreciates the leaf during the opening of the market on Apri 9 2018

This year, the country has sold 201.7 million kg of tobacco compared to 106.5 kg million kg sold the previous year, representing 89.3 percent rise.

Although the initial tobacco estimates indicated a lower supply compared to 171 million kg buyers’ demand, the country oversupplied the leaf due to an influx of tobacco from Mozambique, whose sales closed in August.

TCC chief executive officer Kayisi Sadala said in an interview on Monday the development compromised the plan for the selling season.

He said to deal with the situation, the regulator intensified monitoring and market intelligence.

Sadala said there were also disagreements between some growers and tobacco buying firms bordering on contractual issues under the Intergrated Production System (IPS).

But despite the challenges, he described this year’s market as successful with improved payments to farmers after sales.

Tobacco Association of Malawi (Tama) has described the marketing season as fast despite the huge tobacco volumes sold.

Tama chief executive officer Felix Thole said the market was smooth because there were no disruptions from farmers compared to last season

“Although the prices dwindled in the last quarter after buyers noted the bigger volumes, it was a fairly good season,” he said.

President Peter Mutharika opening this year’s marketing season at Lilongwe Floors on April 9 2018.

Share This Post