Tobacco output drops by 26.7%

Tobacco output drops by 26.7%

Post was last updated: August 19, 2020

Kaisi Sadala

Final tobacco production estimates to drop by a 26.7 percent paint in output from 155 million kilogrammes (kgs) according to second round estimates to 113.3 million kgs.

Estimates for Burley have dropped by 26.6 percent from 128.2 to 94.1 million kgs, Flue Cured by 25.8 percent from 22.4 to 16.6 million kgs while Dark Cured has dropped by 36.7 percent from 4 million kg to 2.5 million kgs.

The general decline in the estimates has been attributed to weather related shocks especially excessive rains that came immediately after the second round crop assessment.

Tobacco Commission (TC) Chief Executive Officer, Kaisi Sadala, said in an interview Tuesday that announcement of earlier closure of the tobacco market this season was necessitated by the drop in output.

“This means that as a country and economy, we will not be able to realise what we projected and buyers too will not be able to buy what they intended to buy,” Sadala said.

As per the supply and demand rule, the prices of the leaf this year were supposed to be higher as demand was projected higher at 161.4 million kgs against the reduced output.

Tobacco Association of Malawi (Tama) Trust Chief Executive Officer, Nixon Lita, said although the internal demand was higher, the reduced output has not affected prices.

He added that the country may see a higher production next farming season but was quick to advise farmers to produce in line with their quotas.

“Grower licensing for 2020/21 season is on and farmers are showing interest to grow again but as Tama, we are advising our members not to over produce but grow as licensed,” Lita said.

By end of week 17 of tobacco sales, the country raked in $168 million, about $36.3 million shy of the $204.3 million realised during the same time last year.

Malawi had initially planned to produce 155 million kgs of tobacco against a trade requirement of 161 million kgs.

Justin Mkweu is a fast growing reporter who currently works with Times Group on the business desk.

He is however flexible as he also writes about current affairs and national issues.

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