Tobacco revenue in the first five weeks of marketing has hit $38.2 million (about K15 billion), a figure which is 38 percent higher than what was earned during the same period last year.
During the first five weeks of marketing last year, tobacco-Malawi’s major export commodity but whose market is currently under threat on the international scene-earned the country $27.6 billion (about K11 billion) at auction floors level, according to a Tobacco Control Commission (TCC) market update Business News has seen.
A Lilongwe-based source from the tobacco industry yesterday said the increase in the revenue realised during the first five weeks is on account of more volumes sold so far and not because of improved prices.
“More tobacco is being sold at the auction floors than was the pace last year and that should explain such an increase in the dollars trickling in. But one would expect that higher average prices should be the major factor explain increased revenues but such is not the case,” said the source who declined to be named but works for one of the biggest tobacco companies.
According to the TCC update, national average price for the leaf in the first five weeks was $1.34 as compared to $1.46, which represents eight percent decrease.
In terms of volume, during the period, cumulatively, 28 million kilogrammes of tobacco was sold on the market as compared to 18.8 million kilogrammes sold during the same period last year.
The analysis further shows that both auction and contract average prices for burley tobacco have gone down by 11 percent and eight percent to settle at $1.21 and $1.40, respectively.
In an interview yesterday, the Tobacco Association of Malawi (Tama) chief executive officer Graham Kunimba said the association is yet to see improved prices on the market but noted that there has been an improvement on no-sales.
Said Kunimba: “Basically, we are singing the same song. Buyers are just paying bare minimum prices which is our concern. But we have seen an improvement in terms of no sales.”
On one hand, president for the Central Region Tobacco Growers Association (CRTGA) Ernest Chadzunda said most members of his association are still complaining about low prices and asked buyers to put increments above the minimum prices, going forward.
Last year, the country sold 168.6 million kilogrammes of tobacco as compared to 80 million kilogrammes sold in 2012, representing a 111 percent increase.