Tobacco Sales Set to Resume This Week

Source from:  by Taonga Sabola, 23 May 2006 - 06:20:45  05/24/2006

Government said Monday it has finished discussions with all stakeholders in the tobacco industry and that sales which were indefinitely suspended last week should resume this week. Tobacco sales were suspended last week after buyers and growers failed to reach an agreement over the price of the green gold as tobacco is popularly known. Agriculture and Food Security Minister Uladi Mussa said Monday differences that existed over prices have been resolved and that the market will be back any day this week. "We met all the people involved in the last five days to find the solution to the problem of prices and what came out clearly was that the buyers were not happy with the grading of the tobacco. They argued that most of the leaf offered for the market was mixed which made it hard for them to pay good prices for it. "Now that everything has been sorted out, we should be able to open the market anyday after Tuesday [today]," added Mussa. He added that government expects tobacco prices to shoot up once the markets are reopened. "We have agreed with them that all good tobacco should attract prices of above the minimum set price and that mouldy tobacco may fetch anything below US$1," he said. Tobacco Control Commission (TCC) General Manager Godfrey Chapola, whose company regulates tobacco sales in the country, said he was waiting for a signal from his boss—the Minister of Agriculture—to reopen the sales. Tobacco is the most important crop to Malawi and the country can hardly survive without trickles of tobacco dollars, especially during this time of the year. Government and the International Monetary Fund (IMF) have agreed that all forex earned from tobacco sales up to June this year should clear outstanding import payments accumulated over the past year. It is believed that the move will help government meet crucial targets to qualify for a debt forgiveness plan under the Highly Indebted Poor Countries (Hipc) initiative to be decided in June. Malawi Economic Justice Network (Mejn) Acting Executive Director Mabvuto Bamusi last week warned that frequent disruptions of tobacco sales present a very big blow to Malawi as it may take long to clear its backlog and build reserves. Enditem