Malawi's Tobacco Price Climbs 16 Percent on Quality

Source from:  Bloomberg 06/01/2009

The average price of tobacco in Malawi, the world's largest producer of the burley variety, climbed 16 percent last week on improved quality, the Tobacco Control Commission said. Tobacco sold for an average of $1.51 per kilogram (2.2 pounds) in the week ended May 22, compared with $1.30 a week earlier, the agency said in a statement handed to reporters on the auction floors of Limbe today. The price is still below the government-mandated price of $2.15 per kilogram, it said. Malawi started setting minimum prices for the various grades of tobacco two years ago after it accused merchants of putting farmers out of business. While dealers denied that they underpaid, buyers assured President Bingu wa Mutharika on May 14 that prices would rise as the quality improves. Supplies during the week climbed 11 percent to 56.4 million kilograms while revenue rose 13 percent to $85.4 million, the report shows. Tobacco generates 60 percent of Malawi's foreign earnings. Burley tobacco is a lower-grade variety of the leaf used to fill cigarettes flavored with higher-grade flue-cured tobacco. Enditem