Tobacco prices picking up, TCC figures show

Tobacco prices are slowly picking up compared to the first days of the selling season in April, figures released by Tobacco Commission (TC) in the seventh week of the sales show.

As of last Friday, the leaf was fetching an average price of $1. 40 (about K1 033) per kilogramme (kg) compared to the first week of the sales when the average price was $1.28 (about K944) per kg.

However, the $1.40 average price is low compared to the average price of $1.61 (about K1 188) during the same period last year, representing a 13 percent price drop.

The auction market continues to be hard-hit by the poor price showing as burley tobacco fetched $1.04 (about K767) per kg compared to the contract market price of $1.46 (about K1 077) per kg.

Last year, burley sold on auction fetched $1.28 (about K944) while on contract, it sold at $1.57 (about K1 158) per kg.

TC figures show that the country has, so far, raked in $62 million (about K46.4 billion) from 44 million kg of tobacco sold.

Compared to last year, revenue has dropped by 37 percent from $99 million (about K73 billion) from 62 million kg sold.

The figures represent a 28 percent drop in the volume sold compared to same period last year.

TC chief executive officer Kayisi Sadala expressed hope that as the market progresses, prices will slowly be picking up.

He said he was, so far, satisfied with developments on the tobacco market in terms of the revenue generated and continued falling of the rejection rate.

Last week, Economics Association of Malawi (Ecama) president Chikumbutso Kalilombe said the lower than expected prices should be a wake-up call for Malawi to intensify diversification away from tobacco.

Last year, tobacco, which is arguably Malawi’s main forex earner, raked in $330 million (about K225 billion) out of 202 million kg sold.