Tobacco production is expected to increase by 21.29 percent to 146,280,128 kilogrammes (kg) this year, first round crop estimates from the Tobacco Commission (TC) have shown.
However, the figure is 13 percent shy of last year’s total tobacco demand at 170 million kg.
Nevertheless, the development has stirred hope among economic experts and industry stakeholders of an increase in foreign exchange earnings from the crop this year.
In an interview, TC Chief Executive Officer, Joseph Chidanti- Malunga, said the development is a step in getting to meet the demand for the crop.
“Getting high volumes to meet the demand is a slow process and we will get there, that is the reason in our strategic plan we said we want to get there by 2028 because you can’t just reach such high volumes overnight. The good thing is that the response from growers has been enormous just that the figures they declared to grow are much bigger than what we have assessed.
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“The weather pattern did not really affect the crop in most of the tobacco growing areas but in some selected areas especially among growers that planted late are the ones that have not been affected,” Chidanti- Malunga said.
But in a separate interview, President of the Tobacco Association of Malawi (TAMA) Trust, Abiel Kalima-Banda while concurring with the figures said the volumes could have been high if not for the dry spell.
“We have had a good season, all the supplies were available in good time, especially for farmers under contract with some of the buying companies. For farmers that planted in November the crop is well and good but for those who planted in January the crop met with the dry spell and most of these fields were not included in the assessment.
“We anticipated an increase in the number of farmers interested in tobacco production which we have witnessed, and we believe with good prices on the market this year, that number will be maintained and eventually increased to boost production,” Kalima-Banda said.
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Acting President of the Economics Association of Malawi (Ecama) Bertha Bangala-Chikadza said the development will culminate in increased foreign exchange earnings from the crop.
“This increase of 21 percent is huge, and we should expect a significant impact in foreign exchange inflow into the country. However, we still need to diversify more in terms of exports to increase the amount of money we get from exports to stabilise the foreign exchange reserves,” Bangala-Chikadza said.
Another economist, Greenwood Nyirenda, while expressing skepticism on the figures on account of weather-related eventualities said it could be significant to impact the economy.
“Assuming that we have good prices on the market, there will be some significant earning from the increased volumes of tobacco. However, critical remains the fact that we need to check our appetite for imports because even the impact from this increase in production will not be enough for our imports.
“For example, our fuel import bill alone cannot be satisfied by proceeds from tobacco and then there is fuel and drugs and other essential imports. We simply need to export more and diversify our economy,” Nyirenda said.
During the 2023 tobacco marketing season, Malawi earned $282.62 million after selling 120 million kg of tobacco at an average price of $2.35.
Tobacco is Malawi’s main export crop.
Currently, Malawi is grappling with foreign exchange reserves seen at one month of import cover recently
