Malawi: Glitches Engulf Auction, Contract Tobacco Selling

Source from:  The Daily Times  05/10/2013

Teething problems continue at the auction floors over sales of auction against contract tobacco, the latest being delays in the selling of auction tobacco due to what seems like misallocated quotas for the two systems.

Meanwhile, a backlog of unsold auction tobacco tobacco bales is reported to have accumulated at Auction Holdings Limited (AHL) warehouses where growers have to wait for so long before selling their tobacco.

AHL Corporate Communications Manager Rosita Tanamana confirmed on Tuesday that there is an arrangement to have only two days for auction tobacco in a week which was causing the delays in clearing auction tobacco.

She said the arrangement is not a true reflection of the volumes coming to the floors as farmers are bringing more bales of auction tobacco than contract.

"We received a directive from Tobacco Control Commission that we should not sell auction tobacco everyday and this has resulted into a backlog in our warehouse," said Tanamana.

She expressed worry that the situation could force farmers to smuggle the tobacco across revenues for the country.

"We are also worried that this practice might prolong the tobacco selling season and as AHL we sympathise with farmers. We only hope that there will be an intervention to sort out this issue," said Tanamana.

According to AHL figures, the auction floors had by Monday received 13,016 bales for auction tobacco and 6,257 bales for contract at the main auction floors in Lilongwe.

Total volumes sold so far at the floors show that 130,707 bales of auction tobacco had been sold compared to 115,954 bales of contract leaf.

"We project that there will be equal volumes at 50-50 between the contract and auction tobacco volumes," said Tanamana.

Tobacco Control Commission (TCC) Chief Executive Officer, Bruce Munthali, told The Daily Times earlier that the new arrangement was agreed by stakeholders in line with with allocated quota of tobacco selling this year where 80 percent of sales are supposed to be under contract and the rest for auction.

A farmer Winkford Sitolo interviewed on Tuesday said his tobacco

bales failed to be auctioned three times, a situation—he said, has affected him financially.

"Last time I was told that I would sell my tobacco on Wednesday [May 8] am here today only to be told that I will sell it on Monday next week. And I'm not sure that I'll really have my bales auctioned," said Sitolo. Enditem