Malawi Tobacco Traded 23% Below Government-Set Price

Source from:  Bloomberg 09/08/2009

The price of tobacco in Malawi, Africa's largest producer of the burley variety, trade 23 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 $1.66 per kilogram (2.2 pounds) during the week ended Sept. 4, 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 $9.05 million during the week, selling 5.2 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. Buyers denied they underpaid farmers. Malawi relies on sales of the leaf for 60 percent of its export earnings. The county has earned $365 million from 197.9 million kilograms of tobacco sold since the market opened. The tobacco marketing season closes on Sept. 18, according to a statement from TCC published today in the Daily Times. Enditem