Malawi Tobacco Traded 18% Below State Price Last Week

Source from:  Bloomberg 08/27/2009

The price of tobacco in Malawi, Africa's second-largest producer of the burley variety, traded 18 percent below the government-mandated price of $2.15 last week, said Auction Holdings Ltd., which manages the country's auction floors. The leaf sold at an average $1.77 per kilogram (2.2 pounds) during the week ended Aug. 21, Auction Holdings said in a weekly sales report published in the Daily Times newspaper today. Since the market opened on March 16, tobacco has sold for an average of $1.72, it said. Malawi earned $16.7 million during the week, selling 8.5 million kilograms of the leaf, Auction Holdings added. The southern African nation started setting minimum prices for the various grades of tobacco two years ago after it accused merchants of putting farmers out of business. Dealers denied that they underpaid farmers. Malawi relies on sales of the leaf for 60 percent of its export earnings. President Bingu wa Mutharika on April 6 threatened to deport buyers of the leaf if prices don't improve. Enditem