Tama Farmers Trust has described this year’s Tobacco season as a mixed bag saying the prolonged selling season has elevated costs of industry players although it ensured farmers sell their remaining bales.
Tama Farmer s Trus t president Abiel Kalima Banda expressed this when summing up the season which is expected to close today October 24, according to a recent statement from the Tobacco Commission (TC).
Meanwhile, as the season nears the total closure after operating for seven months since April, it has raked in $537.9 million (K941.8 billion) after selling 217.9 million kilograms (kg) of the leaf at $2.47 (K4 324) per kg.
In an interview, Kalima Banda who attributed the long length of the season to slow offloading of tobacco during initial stages of the season and increased production said the lengthy period had affected profitability of stakeholders because it increased costs.
He said: “As Tama Farmers Trust, we are grateful to TC because we were worried that some farmers could end up failing to sell their tobacco, but this is not the case.
“However, the length has increased costs to industry stakeholders because they have maintained workers for a long time. As we speak some are still paying workers up to October because the season has prolonged.”
Kalima Banda has since said going forward offloading of tobacco must be improved while also stressing the need for farmers to adhere to their production quarters as advised by the commission to avoid overproduction.
“Our message to farmers is that in the coming growing season, they must adhere to their production quotas to avoid a similar situation where tobacco is overproduced and the selling season is prolonged like in this case. This affects planning ahead of the next season.”
TC s p o k e s p e r s o n Telephorus Chigwenembe was not immediately available to comment on the impact of the prolonged season and the commission’s measures to ensure tobacco offloading is fast-tracked and growers’ quotas are observed.
However, Chigwenembe earlier said the commission is happy that the country has produced over 200 million kg of tobacco stressing that increased volumes mean more revenues to farmers.
Meanwhile, according to Auction Holdings Limited market updates, this year, average price dropped by 20.6 percent compared to last year when the country sold 133 million kg at $396 million (K693 billion) at an average price of $2.98 (K5 217) per kg.
Mwa p a t a In s t i t u t e research fellow Christone Nyondo said the low tobacco pri ces could harm the country’s foreign exchange reserves and trade balance considering that the crop is the country’s main export.
“The market structure is dominated by an oligopoly. Buyers can col lude to ma i n t a i n l ow p r i c e s while farmers, especially smallholders, have little bargaining power,” said Nyondo.
On his part, agriculture policy development expert Tamani Nkhono-Mvula, warned that if such pricing patterns persist, the country’s f ragi le macroeconomic position could worsen.
“ Th e g o v e r nme n t should strengthen farmer cooperatives and create transparent price-setting mechanisms. Otherwise, farmers remain at the mercy of market forces beyond their control,” he said.
This year’s tobacco season opened on 9 April at Lilongwe auction floors with farmers protesting the minimum prices intently.
To b a c c o r e m a i n s Malawi’s main export crop, contributing more than 50 percent to the country’s foreign exchange earnings and 13 percent to the economy.
