Tobacco rejection rate hits 40 percent
The Mzuzu Auction Floors opened yesterday with a 39.2 percent rejection rate, a development that has prompted growers to ask government to intervene.
At 39.2 percent, the rejection rate is 19 percent higher than the acceptable rate of 20 percent and below.
The growers have also lamented poor prices offered under the auction market.
A snap survey by Business News at the market showed a maximum of $1.70 (about K1 250) per kilogramme (kg) and a minimum of $0.90 (about k660) per kg for tobacco offered under the auction market.
However, the same quality leaf (Grade 3) fetched a maximum of $2.20 (about K1 600) under thecontract market.
One of the farmers from Enukweni in Mzimba District, David Nyirenda said the high rejection rate coupled with poor prices will negatively impact the growers who have loans to repay.
Another big grower from Mzuzu, Harry Mkandawire, also questioned the high rejection rate experienced at the auction section.
He said: “We would like to request government to hold discussions with the tobacco buyers to find out the leading cause to these high rejection rates and poor prices at auction.”
According to Mkandawire, what the growers are getting from their sales is below production cost currently at $1.35 (about K890).
Mkandawire,was however, happy with the prices offered at the contract market where the highest leaf fetched $2.20 per kg.
Speaking in an interview on the sidelines of the opening ceremony, Principal Secretary in the Ministry of Agriculture, Irrigation and Water Development, Grey Nyandule-Phiri, blamed the growers for mixing their tobacco grades and high moisture content.
“My appeal to the growers is to refrain from mixing several grades of tobacco in one bale. Let them grade their tobacco properly to fetch reasonable prices, and not the minimum prices,” he said.
Nyandule Phiri further said the regulator, Tobacco Commission, will engage the buyers to resolve the issue.
Despite the hiccups, Nyandule Phiri observed Mzuzu growers are offering good quality leaf as compared to other floors.
While a total of 1 623 bales were offered for sale on Monday, the floors has a current stock of 4 886 ready to be sold in the subsequent days.
Last Friday, tobacco sales at Limbe Auction Floors were suspended for about two hours following an outcry from growers against low prices and high rejection rates at 48 percent, arguing that they stand to lose out on returns.
Final crop assessment conducted from February 24 to March 8 established that this year’s tobacco output is at 205.46 million kg against a buyers’ demand of 166.8 million kg.
Tobacco contributes about 13 percent to the country’s gross domestic product (GDP).
