Malawi: Tobacco Industry for Waiver of Duty on Coal

Source from:  Daily Times (mw)  03/27/2013

The tobacco industry has presented to government a proposal for the waiver of duty on importation of coal as one way of promoting the production of flue cured tobacco in the country.

The proposals follows a call made by President Joyce Banda at the opening of this year's tobacco marketing season early this month that Malawi should increase production of flu cured tobacco as it was on demand internationally.
 
Tobacco Control Commission (TCC) Chief Executive Officer, Bruce Munthali, said in an interview in Lilongwe the industry wants to maximise the use of coal in the curing of tobacco instead of firewood due to environmental concerns.
 
"This type of tobacco is on huge demand but production has recently dropped in the country," said Munthali.
 
He said, however, there were indications from the industry that production of flue-cured tobacco can be increased if farmers were supported to manage the cost of production through good prices of inputs like coal.
 
"Potential producers have proposed to start using exported coal because they believe that locally produced coal is expensive," said Munthali.
 
Munthali said the industry is looking at the prospect of increasing Malawi flue-cured tobacco production to between 30 and 40 million kilogramme next year from the average of 20 million kilogrammes being produced currently.
 
This year, Malawi has produced 16 million kilogrammes of flue-cured tobacco, up from 11 million kg produced last year.
 
The closure of Press Agriculture Limited a few years ago, which was a dominant producer of flue cured, is attributed to the low production levels which is said to have gone down by as much as 50 percent over the past five years.
 
Meanwhile, prices of flue-cured tobacco started selling on Friday at Chinkhoma Auction Floors with prices reaching US$3.7 per kilogramme while the lowest was US$1.60.
 
Munthali described the prices as "very exciting".
 
"We hope this will encourage increased production next year," he said.
 
He was optimistic that the prices would improve and go beyond US$4 per kilogramme as good quality leaf starts to come to the markets.
 
"The market is now receiving tobacco leaf of compromised quality but prices usually improved once high quality tobacco starts coming," said Munthali.
 
Malawi has this year produced a total of about 160 million kilogrammes of all tobacco types.
 
The industry is expected to generate at least US$300 million in foreign exchange earnings, up from US$179 million realised last year. Enditem