Tobacco Eyes $500 Million Milestone: A Game Changer for Malawi’s Economy

Key Business Points

• Tobacco revenue is expected to reach $500 million by the end of the season, driven by record sales of 186 million kilogrammes, with an average price of $2.55 per kilogramme.
• Increased competition from Zambia and Mozambique may affect local tobacco producers due to declining global demand, highlighting the need for investing in production and building capacity.
• Replicating best practices from the tobacco industry in other potential industries, such as legumes, could encourage farmers to produce more and improve the overall agriculture sector.

The tobacco industry in Malawi is experiencing a significant surge in revenue, with sales already reaching the highest mark in six years. As of August 5, 186 million kilogrammes of tobacco valued at $473 million had been sold, with an average price of $2.55 per kilogramme. This increased revenue is largely due to increased tobacco volumes, which are crawling back to old levels of above 200 million kg. According to the Tobacco Commission, tobacco production in 2025 is the highest for Malawi in six years.

Agriculture policy expert Tamani Nkhono Mvula has commended the trends in the industry, but also cautioned that the global trend is still showing declining demand for tobacco, which may eventually affect local producers. Additionally, Zambia and Mozambique are emerging as competitors, increasing their market share and requiring Malawi to invest in production and build capacity. Nkhono Mvula emphasized the need for Malawi to replicate the best practices in the tobacco industry, such as predictable markets and proper support systems, in other potential industries like legumes.

The tobacco industry is the most structured and predictable market in Malawi, making it easier for farmers to produce and sell their crops. In 2024, the industry reached a milestone, generating over $545 million worth of exports, which represented 57 percent of total exports. As the industry continues to grow, it is essential for local entrepreneurs and farmers to be aware of the current trends and challenges and to plan strategically to remain competitive. By doing so, they can capitalize on the opportunities presented by the tobacco industry and contribute to the country’s economic growth. As the market is set to close on August 29, ndondomeko ya kaya (local farmers) and wafanyabiashara (business owners) should take note of the increasing competition and declining global demand, and focus on building capacity and improving production to remain competitive in the market.

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