Tobacco output up 33% over demand—Report
Tobacco output is up by 53 million kilogrammes (kg), or 33 percent over the international trade requirement of 158.1 million kilogrammes according to first round crop estimates released this week.
The production estimates have put output at 211 million kilogrammes.
Last year, the tobacco industry also over produced the leaf, leading to poor market prices and record high rejection rates.
About 192.6 million kilogrammes was produced against a trade requirement of 176.8 million kilogrammes, according to Tobacco Control Commission (TCC) figures.
Although the 2016 trade requirement for burley is 132.36 million kilogrammes, the country might produce over 180 million kilogrammes of the crop, 21.2 million of flue cured and about three million kg of dark fire cured.
However, Tobacco Control Commission (TCC) chief executive officer Albert Changaya on Tuesday downplayed the figures, saying the second round crop assessment would bring more realistic figures.
“The main worry is burley, but I would not worry that much now because we are sending another team in the fields next Monday for the second round crop assessment, which comes out with more realistic figures than the first round,” he said.
Changaya said TCC is in the process of finding out from buyers if they can increase the orders for burley.
He said Malawi could be lucky this year as the global production trend of the leaf has dropped.
“There is a drop of burley production in Zambia, Mozambique, South Africa, Brazil, Zimbabwe and America. This can actually help us to cover up for the drop,” said Changaya.
He has called upon industry players not to worry about the oversupply “maybe until later in the season”.
Tobacco Association of Malawi (Tama) president Reuben Maigwa said this year’s tobacco season will a mixed fortune because of issues of likely overproduction and dry spells.
In order to achieve sustainable production and marketing of tobacco, TCC has banned qouta uplifts during this year’s selling season, allowing growers an additional 10 percent of the initial volume applied to align production to demand.
In 2015, the country sold 192.6 million kg of tobacoo, earning $337.40 million (K257 billion).
Tobacco contributes about 60 percent of the country’s total foreign exchange earnings and about 25 percent to tax revenue. n
