Malawi Sees 2006 Tobacco Revenue Rising 9.8 Pct

Source from:  Thu Jun 8, 2006 11:39 AM GMT By Mabvuto Banda BLANTYRE (Reuters) 06/09/2006

Malawi expects tobacco revenue to rise 9.8 percent to $178 million this year due to higher production, a senior official for the government body regulating the industry said on Thursday. Tobacco accounts for more than 70 percent of the southeastern African nation's exports and about 15 percent of gross domestic product. "With the already-sold tobacco, it is projected that the total revenue realized on the floor will be $178 million. This means a 9.8 percent increase over last year's revenue of $162 million because of a higher production this year," Tobacco Control Commission general manager Godfrey Chapola said in a statement. Malawi is expected to produce 158,000 metric tonnes of tobacco in 2006, a jump from 145 000 tonnes last year but still lower than 170,000 tonnes in 2004. Around two million of the country's 12 million people depend on the crop and related industries for their livelihood. Higher tobacco production and revenue would come as a welcome relief to many who had feared the impact of boycotts imposed by major buyers in response to the government's decision earlier this year to set a floor on prices. President Bingu wa Mutharika imposed minimum prices of $1.10 per kilogram on low-grade tobacco and $1.70 per kilogram on higher grade tobacco, sparking the boycott by U.S.-based Alliance One Tobacco and Limbe Leaf Tobacco, which is majority owned by the Swiss-registered Continental Tobacco Company. "This (increased revenue) is encouraging because we were all scared the boycotts would shrink our forex earnings this year," Finance Minister Goodall Gondwe told Reuters. Gondwe is scheduled to present a budget next week in which he will forecast Malawi's economy to grow by 8.4 percent and inflation to fall to 10.9 percent on account of improved agricultural production. Enditem