Tobacco raises K64bn in 2 weeks—TC report

Revenue from tobacco has risen to $37 million (about K64.7 billion) from 14 million kilogrammes (kg) of the leaf sold in two weeks, a Tobacco Commission (TC) market update show.

The earnings are over double the $16 million (about K28 billion) raised during the same period last year from 8.1 million kg of tobacco sold, according to the update.

The market update says the uptake of the leaf is impressive this year compared to the same period last year.

Reads the update in part: “Trading is going on well at the floors with higher volumes and average prices this year than during the same period last year.”

So far, the average price is $2.54 per kg (about K4 447) with the maximum price recorded at $3.11 (about K5 445) per kg, according to the update which shows that 10 firms are taking part in buying tobacco, the country’s main foreign exchange earner.

Tama Farmers Trust chief executive officer Nixon Lita said in an interview on Tuesday that the continued good prices are cementing their hope that this will be a good season.

In a separate interview, a large-scale tobacco grower, Abiel Kalima Banda, said he was impressed because the rejection rate is at zero, a development which is unprecedented.

He said: “Since the market started, rejection has not been seen. The main reason buyers reject some tobacco is poor grading, but it is not likely to happen this season because we properly taught farmers how to grade their tobacco in coordination with the buyers.”

TC board chairperson Godfrey Chapola said in an interview that the regulatory body is excited with the prices prevailing on the market thus far.

 “But what this tells us is that if buying companies continue offering good prices this year, our farmers will be motivated to produce more, thereby helping us meet the trade demand which this year we will not be able to meet,” he said.

Chapola said TC has projected output at 140 million kg against the international buyers’ demad at 190 million kg.

The tobacco season which started on April 15 is expected to run for 17 weeks up to August 4, according to TC.