Malawi's Tobacco Sales on Course

Source from:  By Tione Andsen Blantyre, April 20, TNL 04/23/2007

Tobacco growers in Malawi have expressed satisfaction with the current tobacco prizing at the country's three main auction floors. The tobacco sales which started two weeks ago at Limbe, Lilongwe and Mzuzu auction floors have registered a rise in the tobacco sales as compared to last year's sales. According to reports from the three main auction floors, the tobacco pricing stands at US$ 2.06 per kilogramme as compared to US$ 1.70 per kilogramme last year. This could be attributed to the fact that the government has set minimum prices for each category of tobacco and buyers were expected to offer price tags within the set range. Last season, farmers carried foul at the auction floors as buyers were buying the tobacco leaf at low prices up to 20 cent per kg. It took the intervention of the State President, Dr Bingu wa Mutharika to come up with a set of minimum prices of tobacco ranging from US$ 110.00 to US$ 180.00 per kilogramme in order to resolve the crisis. The intervention was not effected by the buyers and they continued to offer low prices and this prompted the president to issue warning to the country's traditional buyers with deportations. Despite having fair prices, the country's tobacco governing body, the Tobacco Association of Malawi (TAMA) has warned growers against mixing different grades of leaf to avoid lowering the value of their product. The Vice President of the Association, Smart Zimba explained that mixing tobacco grades would give buyers a chance to offer them low prices. He said it was encouraging that this year's tobacco sales have started at a positive note where growers are happy with the pricing. Zimba added farmers should strive to present good quality tobacco to the floors in order to fetch better prices. If growers could improve on the quality of their leaf no buyer would have an excuse for not buying it at a good rate. This could help the farmers to have better marginal results fro the products,?the vice president viewed. Zimba expressed concern that the effects of mixing grades have been noted at the Mzuzu Auction floors where prices dropped from US$ 2.20 per kilogramme to US$ 1.95 per kilogramme. He said the malpractice make the good leaf suffer at the expense of poor ones. A tobacco farmer from central region district of Dowa, Duncan Mafuta said growers have been given hope with the current pricing. He said most growers had reduced their production due to frustration they were encountering at the floors in the past season. Mafuta said it was sad that the leaf was now fetching a reasonable price when the country's production had gone down. We are only hoping that the trends would continue throughout of this auctioning period. This could mean the revival of the tobacco industry which was at the virtue of dying,?the tobacco grower observed. Another tobacco farmer from western border district of Mchinji, Dexter Phiri said growers would not be tempted to sale their tobacco to the neighbouring countries of Zambia and Mozambique. He said most growers were prepared to sale their tobacco to the two neighboring countries as the case in the past years where the leaf was fetching better prices. Phiri explained that the Government, TAMA and the Tobacco Control Commission (TCC) should be commended for their efforts to ensuring that better prices were being offer at the floors. He said their efforts would increase the country's forex levels and growers would have cash to spend in meeting their basic needs. For the past decade the tobacco prices have hovered between US$ 0.70 and US$ 0.90 per kilogramme, a development that frustrated most growers from growing the leaf opting for other avenues. TCC has indicated that for the past two weeks of sales, the country's tobacco has fetched US$ 9.8 million from 7 million kilogrammes so far sold at the auction floors at an average price of US$ 1.40 per kilogramme. Last year the same period, only 237,899 kilogrammes of all type of tobacco were sold for US$ 266,700.00 at an average price of US$ 1.12 per kilogramme. Enditem