Mixed response to tobacco market

Post was last updated: May 1, 2018

There are mixed views among key stakeholders in the tobacco supply chain over the market’s outcomes about four weeks after sales were opened.

While regulator, the Tobacco Control Commission (TCC) and AHL Group have said that they are happy with proceedings, Tobacco Association of Malawi (Tama) feels more can still be done to improve prices being offered to farmers.

In two weeks, revenue from tobacco hit $17.9 million at an average price of $1.42 per kilogramme (Kg), compared to the $6 million earned during the same period last year at an average of $1.61 per Kg.

The money was realised after 2.6 million Kgs of tobacco were sold, up from 3.7 million Kgs traded during the same period last year.

Within the first weeks of sales last year, farmers also expressed disappointment over low prices offered coupled with high rejection rates. This led to frequent market interruptions.

AHL Group Corporate Affairs Manager, Mark Ndipita, said the market has not experienced any major stoppages compared to last year.

“In terms of no-sale rejection rates, these are no big problems as they are within accepted ranges,” Ndipita said.

In an earlier interview, TCC Chief Executive Officer, Kaisi Sadala, said there is improvement in the flow of the market this year.

He said reforms that have been implemented on the way the market is run gives hope of smooth operations.

“There is a guarantee for smooth flow of trading compared to previous marketing seasons with potential rise in revenue,” he said.

But, in a separate interview, Tama Chief Executive Officer, Matthews Zulu, said despite the positive sentiments ahead of the opening of the market, the situation on the ground does not consolidate this hope.

“There were higher expectations that farmers would get better prices this year, but prices on offer in the first three weeks have been below expectations.

“Buyers can do better considering the rise in demand and low supply.We are still hopeful that the situation may change,” Zulu said.

He then asked tobacco farmers to properly grade their tobacco and avoid mixing their tobacco with non-tobacco related substances.

For the 2018 marketing season, buyers have placed a demand of 171 million Kgs of all kinds of tobacco against the 149 million Kgs grown.

Last year the country grew about 124 million Kgs of all types of tobacco.

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