Malawi Minimum Tobacco Price Cut 7%, Tobacco Commission Says

Source from:  Bloomberg 03/12/2010

The minimum price paid to tobacco producers in Malawi, Africa's largest producer of the burley variety, has been reduced by 7 percent as the cost of producing the leaf fell, the Tobacco Control Commission said. Burley tobacco will trade at a minimum price of $2 per kilogram (2.2 pounds) from $2.15, while flue-cured tobacco will decline to $3 a kilogram form $3.60, the commission's Chief Executive Officer, Bruce Munthali, told reporters in the capital, Lilongwe, yesterday, ahead of the opening of the tobacco selling season on March 16. "A memorandum of understanding has been signed with buyers on these prices," Munthali said. "We don't expect to have problems this year." Prices of tobacco in the southern African nation picked up after the country's leader, Bingu wa Mutharika, deported four officials at its three top tobacco-buying companies, accusing them of sabotaging his economic agenda by offering farmers lower prices. Production of the leaf by Malawi, which relies on tobacco for 60 percent of its foreign-exchange earnings, will probably decline 7.3 percent to 215.3 million kilograms this year because of drought, according to the commission. Enditem