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Buyers shun top grade tobacco

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Tobacco buyers at some of the country’s auction floors are reported to have started shunning top grade leaf, a development which has surprised the floors’ operator, AHL Group.

AHL Group reports in its latest tobacco market update that the top leaf grade tobacco, which was selling before, is now being shunned by the merchants on the auction market.

“This is very strange and the reasons for this development remains a mystery,” reads the market update from AHL Group, in part.

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The development comes at a time buyers have been accused of favouring growers on contract tobacco while offering low prices to non-contracted farmers, especially those selling flue cured tobacco.

During the week under review, the average price is reported to have dropped slightly while rejection rate on burley auction market is said to have risen from 17 percent in the previous week to 27 percent last week.

“This pushed growers to protest and disrupt the market temporarily on Thursday at the Lilongwe Floors,” AHL Group, in the report says.

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The Limbe floor, which was scheduled to close by last Friday, failed as growers continued to deliver tobacco to the market on the final day and the sales have been extended to next week.

The market, where a total of 143.7 million kilogrammes of all tobacco types worth US$256 million has been sold so far at an average price of US$1.78 per kilogramme, is expected to generate about US$300 million from the sales from all types of tobacco.

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