Tobacco sales open, price hits $3 per kg
The 2024 Tobacco Marketing Season officially opened on Monday at Chinkhoma Floors in Kasungu District with the price of the leaf surpassing $3 (about K5 253) per kilogramme (kg), to the delight of farmers and other stakeholders.
The opening of the market comes against the backdrop of figures showing that tobacco output is projected at 140 million kg against buyers’ demand at 190 million kg, a development stakeholders believe will push up the price of the leaf as demand outstrips supply.
Most farmers who sold their crop in the morning before the official opening expressed satisfaction with the prices, with most price tags indicating the price above $2 (about K3 502) per kg.
Osward Mbewa, a tobacco farmer from Traditional Authority Njombwa in Kasungu, said he was happy with the opening prices, having sold eight bales of burley tobacco.
“I brought eight bales of burley on auction market which have been sold at a minimum price of $2.40 (about K4 202) per kg to Nyasa Tobacco,” he said in an interview.
President Lazarus Chakwera, who officially opened the market, said the opening up of the market to more buyers has positive ripple effects on the farmers.
He said in a brief interview: “We do need more buyers because that competition will be healthy. I have already seen how that played out today because they are competing to buy the leaf even though this is lower [quality] leaf.
“They have started with good prices and I trust that we can continue with this type of performance.”
Offering the highest opening price was Nyasa Tobacco, a local company that partnered State-owned Smallholder Farmers Fertiliser Revolving Fund of Malawi (SFFRFM) to buy tobacco, the country’s main foreign exchange earner.
Nyasa Tobacco chairperson Konrad Buckle told journalists that their entry on the market has changed the market dynamics and created competition to the benefit of the farmers.
He said: “Nyasa was chosen as a partner with SFFRFM with the experience and the vehicle to identify new markets and expand market base for Malawi and make sure that real benefits come back into farmers pocket.”
Buckle said there are new export markets which will pull significant volumes that the company intends to buy, adding that the firm plans to buy more than 20 million kg on the auction market.
Tobacco Commission (TC) spokesperson Telephorus Chigwenembe said the regulator was satisfied with how the market had started.
He said: “We have seen prices above $3 per kg. This is exciting.
“It is our expectation that we will have such prices throughout the marketing season.”
Chigwenembe said Chinkhoma Floors is the first to open this year to recognise the special place that Kasungu District occupies in the history of tobacco production in the country.
“We wanted to honour tobacco farmers in Kasungu and the surrounding districts,” he said.
About 10 companies have, so far, registered to buy the leaf this season, according to TC.
Last year, the market lasted 17 weeks, raking in $282.6 million (K494 billion) out of 120 million kg at an average price of $2.35 (K4 114) per kg.
Tobacco is country’s main foreign exchange earner, contributes about 13 percent to the national economy and the sector employs millions of people along its value chain. n
