Farmers shun auction,prefer contract market

Tobacco prices excite farmers | The Nation Online

Post was last updated: June 3, 2023

Tobacco growers have expressed optimism and contentment for better gains this year on the back of consistent rise in tobacco prices offered on the country’s auction floors.

Tobacco Commission (TC) figures show that since the start of the market, tobacco prices have moved from an average of $1.85 per kilogramme (kg) in the week ending April 14 to $2.19 per kg as of last week.

Tobacco remains Malawi’s number one foreign exchange earner amid several shocks

During the same period last year, the average tobacco prices marginally moved from $1.35 per kg at the start of the market season to $1.96 per kg in the sixth week of the season.

Tama Farmers Trust President Abiel Kalima Banda said in an interview on Monday, tobacco farmers are impressed and motivated with the prices this year.

“For the first time in years, we have seen a constant rise in prices which is a big motivation looking at where we are coming from. Most farmers abandoned this kind of farming due to prices but what we see this year is really encouraging.

“We are positive that should this trend continue, farmers that had abandoned tobacco will surely come back,” he said.

Speaking separately, Frank Naphambo, a tobacco grower from Matawa Village, Traditional Authority Kaduya in Phalombe also described this year’s prices as ‘fair’, but encouraged buyers to maintain the momentum.

 “Often times, the prices are good at the start like this but as the market progresses they go down significantly. We hope to continue on this path and encourage the commission to continue monitoring the market so that the labour costs we have invested should be realised,” he said.

Commenting on the market, TC spokesperson Telephorus Chigwenembe maintained that the commission is optimistic of a good tobacco market season on account of goods prices and low rejections.

He said: “From our reading of the market, 2023 will remain one of the best tobacco selling seasons. This far, we are pleased with the quality of participation by tobacco buyers this year.

“Other than offering competitive prices, the market is also enjoying an almost zero-rejection rate since the opening of the season.”

Looking ahead, Chigwenembe said that the commission is optimistic that the performance of the market season this year will have a positive effect on production next season.

“Farmers will be motivated to grow more tobacco which we need because there is currently an unsatisfied global demand for our tobacco.

According to TC figures, this year buyers demanded 170 million kgs but the country produced just around 126 million kgs, which is 44 million kgs short of what is being demanded this year.

Meanwhile, available data shows that the market has cumulatively achieved $112.1 million (about K116 billion) from 50.3 million kgs of tobacco. This compares to $22.4 million (about K23  billion) realised from 11.1 million kgs tobacco during the same period last year

This year the Malawi tobacco market has 10 buyers, namely, Limbe Leaf, Alliance One, Premium Tobacco, Japan Tobacco International, Associated Central African Limited, African Tobacco Services, Hail and Cotton, Protrade, Watergen and Voedsel.

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