Tobacco rejection rate drop excites growers

Tobacco growers have expressed optimism for better gains this year on the back of the drop in the leaf’s rejection rate at the country’s auction floors.

The development, the first since the market opened in early April, has also seen a slight improvement in the rejection rate for flue tobacco sold under auction from 80 percent last week to 72 percent this week, according to AHL Group tobacco market update.

Reacting to the development, Tobacco Association of Malawi (Tama) chief executive officer Graham Kunimba described the drop as a positive development that has brought excitement to the farmers.

“We are very happy with the drop in the rejection rate. It is every grower’s wish and expectation to sell their products at a reasonable price. This trend complements our expectations, hard work and further motivates the farmers,” he said.

He, however, encouraged government and buyers to work on reducing the rejection rate even further.

“Last year, the rate went down to as low as 10 percent. We call on government and the buyers to do the same this year,” he said.

Tobacco Control Commission chief executive officer Bruce Munthali, in an interview on Wednesday, attributed the drop in rejection rate to competition on the market and that upper leaf stock, which is good, is currently being brought to the auction floors.

On the slight drop of flue cured tobacco, Munthali said it is largely due to global over supply of the tobacco type.

“Malawi has not over produced flue-cured, but because more countries have over-produced, we are affected. This is so because tobacco trends are linked globally, so if one or two countries over-produce, every tobacco producing country is affected,” he said.

The weekly tobacco update also indicate that the daily average offerings increased from 21 000 bales in a day last week to 24 000 bales per day in the week under review, an indication that most growers have finished grading their tobacco.

This year’s tobacco market season started on April 8 with the opening of Lilongwe Auction Floors followed by Limbe in Blantyre, Chinkhoma in Kasungu and Mzuzu Auction.

Thus far, tobacco revenue is the eighth week of sales is at $107 million (K48 billion), which is about 35 percent of the $300 million (K133.8 billion) projected revenue for this year.