Tobacco Growers in Tears

Source from:  Daily Times (mw) 04/03/2009

There are loud cries from tobacco growers at Lilongwe Auction Floors with farmers either making losses or simply breaking even. Tobacco buyers at the floors continued to buy the leaf at below officially recommended prices, ignoring an earlier threat from President Bingu wa Mutharika that he would revoke licenses for defiant buyers. A visit to the floors Wednesday morning established that burley tobacco was being sold at prices ranging from 90 cents to US$2, sharply below the minimum price of US$2.15 as announced by the President when he officially opened the floor on March 16 this year. Some growers interviewed inside the floors alleged that any tobacco sold at more than US$2 is being returned by the buyers for no apparent reason. Thirty-year-old Madalitso Kathele, a tobacco grower from Khuyu area in Chief Kalumo's area in Ntchisi, said he sold four bales last Friday at between US$1.11 and US$1.17 per kilogram. He expected to sell another four bales yesterday at the same prices. Kathele has left another four bales at home to sell later. Kathele said at such prices, he was either making losses or just breaking even considering the amount of money he spent on fertiliser, labour and transport. "I spent over K100,000 on fertiliszer alone, paid K30,000 for labour and I expect to spend another K30,000 to transport all the bales to the auction floors, just to mention the major expenses. That is already over K160,000 yet my bales are fetching between K11,000 to K17,000 each. Where is the profit there?" wondered Kathele. The story is worse for traders who bought the leaf from growers. One trader, Isaac James from Mponela in Dowa, said before the auction floors opened when most traders bought their tobacco, growers were selling tobacco at K140 a kilogram, translating into K14,000 for each 100kg bale. Add another K4,000 for labour and transport, an average bale would cost around K18,000. Both Kathele and James said they are likely to give up on tobacco business if the price trend continues at the auction floors. "Growers are silent and patient because they are still hopeful that the [state] President will help them on the matter. Last year, the President successfully intervened on the matter, so growers don't see how he could fail to do it now, especially with elections just around the corner," said Kathele. Tobacco Control Commission (TCC) Operations Manager Henderson Chimoyo told the press earlier that the prices are likely to improve once better quality top leaf starts coming into the floors. He said the tobacco that comes to the floors during the early days is usually bottom leaf, which is soiled and of poorer quality. However, economic experts have blamed the international financial crisis for the low prices, saying big tobacco buying companies such as BAT and Philip Morris are equally feeling the pinch of the credit crunch. Enditem