Tobacco smuggling increasing
Despite tobacco fetching good prices in the country this year, figures from neighbouring countries show that prices there are still attractive to Malawi farmers, hence the increase in smuggling cases.
Zimbabwe, for instance, tobacco prices opened at $4.92 (about K8 614) per kilogramme (kg), up from the previous year’s $4.35 (about K7 616) per kg.
In Zambia, the highest price reached $6.99 (about K12 239) per kg while the average price is $3.36 (about K5 883) per kg.
This comes at a time authorities are boasting better tobacco prices this year in domestic floors, which are averaging $2.78 (about K4 867) per kg with $3.25 (about K5 690) per kg recorded as the highest price mainly for barley.
Meanwhile, there are growing cases of smuggling, especially in Mchinji, where either farmers or middlemen aim at sending their tobacco to Zambia for higher prices.
One farmer, who bypasses local floors told Voice of America that they get double the profits from cross-border trading.
“Currently, tobacco prices at the floors in Zambia are averaged $5/kg for the highest quality leaf while the cheapest is $2/kg while here in Malawi, the average price for the highest-quality leaf is $3.05 and the cheapest is $2.40/kg,” he said.
In an interview, Tama Farmers Trust president Abiel Kalima Banda said he is not sure about the prices in Zambia and Zimbabwe, stressing that the Tobacco Commission (TC) could be better-placed to comment.
Kalima said: “I don’t want to comment about prices in our neighbouring countries. What we know so far is that the ones involved in smuggling are middlemen or vendors whose main interests are not tobacco prices, because we are hearing they exchange the leaf with assets such as motorbikes.”
In a separate interview, TC spokesperson Telephorus Chigwenembe said the high prices of tobacco in neighbouring countries is likely to depend on the type of tobacco and quality, but he said the buyers are better-placed to explain what is happening.
“On price variations, I think it has to depend on the type of tobacco because some tobacco types fetch significantly higher prices than burley but, again, there are also issues of quality which could be considered,” he said.
Meanwhile, an agricultural expert Leonard Chimwaza described the situation as complex, stressing that this shows existing gaps on market intelligence and price-negotiating capabilities, among other factors.
“I don’t agree on the quality aspect because we have seen that Zimbabwe and Zambia tobacco is not different from ours in terms of standard. I think such price variations could call for proper market intelligence with the buyers and some price-negotiating strategies.
“The challenge is, maybe, we are not able to follow through to establish whether Malawi tobacco is sold at lower prices at the international market to substantiate quality suggestions; otherwise, I believe tobacco produced within this region is similar in terms of quality,” Chimwaza said.
Recently, TC and the police confiscated flu cured tobacco in a two-tonnes truck in Mchinji, suspected to be smuggled to Zambia and another two tonnes in Namitete believed to be heading to Mozambique.
The incidents also followed interception of a truck carrying 48 bales of flu cured tobacco which was about to be smuggled out of the country in Mchinji.
