Mutharika Goofed on Tobacco Prices--JZU

Source from:  BY MAXWELL NG'AMBI 04:04:34 - 11 April 2006 04/12/2006

Malawi Congress Party (MCP) president and Leader of Opposition in Parliament, John Tembo says President Bingu wa Mutharika goofed when he dictated minimum tobacco prices, saying the country's tobacco system just needed "cleaning up". Tembo, a known tobacco farmer himself, said this Saturday in an interview with The Daily Times. The MCP leader said he would be a making an official statement on tobacco prices when Parliament resumes today. "I don't think posting tobacco prices is a solution, just find out if buyers are indeed buying at the dictated prices. The whole system just needs cleaning up," he said. Tembo, who admitted to have been a tobacco farmer for a very long time, said the solution would be to find new markets for tobacco and not depend on local buyers. The one time Finance Minister and Reserve Bank governor said he has now stopped growing tobacco because he has no access to money lending institutions by virtue of being in the opposition. "The top MCP leadership does not have access to money lending institutions," he said without elaborating further on the matter. Minister of Agriculture and Food Security, Uladi Mussa said Mutharika has not goofed on tobacco prices, adding Malawi Leaf Limited has been formed to export tobacco. "Malawi Leaf Limited, a subsidiary of Auction Holdings Limited is also buying tobacco which we will sell where our local buyers sell our tobacco," he said. Mussa said he could not disclose names of companies where Alliance One and Limbe Leaf sell Malawian tobacco for fear of sabotage. However, when quizzed further, Mussa revealed that Alliance One and Limbe Leaf sell Malawian tobacco to a consortium called Philip Morris in the United State of America. "But we are also exploring markets in East Asia such as Taiwan, Saudi Arabia and Egypt. You can see from there that the President has not goofed," he said. The Agriculture Minister said Malawi Leaf Limited is buying tobacco at the posted prices if the usual buyers refuse to buy at the said prices. "The problem is that there were only two companies buying tobacco in Malawi. As such, there was no competition," he said. Tobacco Exporters Association of Malawi (Team) vice-chairperson Alastair Craik refused to comment on issues raised by both Tembo and Mussa. Mutharika, during the official opening of auction floors on March 27, announced that lowest grade tobacco should be bought at a minimum of US$1.10 and the highest grade going at US$1.70. However, a day after the announcement sales were suspended at Lilongwe Auction floors as buyers could not buy tobacco at the dictated prices. Just last week, the same happened at Limbe Auction floors in Blantyre. Although sales have resumed at both Lilongwe and Limbe auction floors, growers are still complaining that buyers are not buying the commodity as directed by the President. Enditem