Malawi's Tobacco Earnings Drop

Source from:  AP 06/07/2005

Earnings from Malawi's chief export crop, tobacco, are scheduled to drop a record 22.5 per cent in 2005 due to general slump in global prices, the watchdog Tobacco Control Commission said Friday. Tobacco, dubbed Malawi's "green gold", is the country's chief foreign exchange earner. Currently, about one million people are employed by the tobacco industry, making it the nation's largest employer. But prices at the country's three auction floors have nose-dived over the past years, leading to protests from farmers. Even though Malawi is the world's biggest exporter of burley tobacco, a thin-leafed variety dried in the open air, 60 per cent of Malawians still live under the poverty line. In its preliminary report, the tobacco commission said Malawi had sold 44.2 million kilograms (97 million pounds) of tobacco at US$160 million (euro130 million) by May 19, compared to 44.5 million kilograms (98 pounds), which fetched US$206 milllion (euro168 million) during the same period in 2004. "This shows a revenue deficit of US$46.3 million (euro38 million) for this year over 2004," the report said. The tobacco commission blamed the fall in revenue on high production costs, the collapse of multinational cigarette companies, high taxation imposed on cigarette makers and poor technologies used to produce the leaf.