Tobacco growers are helpful as the tobacco selling season kicks off in Lilongwe today.
President Lazarus Chakwera is expected to open this year’s tobacco sales at the Lilongwe Auction Floors at Kanengo in the administrative capital.
Tama Trust President Abel Masache Kalima Banda told Business Times Wednesday that the elevated expectations are based on a number of factors, including the expected reduced crop size this year.
Tobacco Commission indicated that tobacco production is expected to shrink by about 20 percent due to the late onset of rains.
According to Kalima Banda, the country’s tobacco output is lower this year than last year.
“The supply is very low and when the supply is low, you expect very good prices. Even the growers are now grading their crop with expectations of improved prices.
“In addition, the cost of production this year has been very high as compared to other years. Fertiliser was bought at a higher price, all the materials were bought at a higher price. The growers also kept the seedlings at the nursery for a long time from August up to January. Farmers were traveling long distances to buy water just to rescue the seedlings at the nursery,” Kalima Banda said.
A visit to the Lilongwe Auction Floors Wednesday morning revealed that workers were busy making final touches in readiness for the opening of the market.
Feston Kalinda from Mchikumbe Growers Association said they expect nothing but improved prices when the market opens today.
“We are expecting the lowest quality leaf to fetch at least $2.50 per kg because the cost of production has been extremely high this year.
“If the top quality tobacco could fetch around $4 per kg, it could be better as it would help growers breakeven,” Kalinda said.
In a tobacco update Wednesday, TC said this year’s minimum prices are higher than last year’s, adding that the prices have been set in consideration to the cost of production.
“According to the first round crop estimates survey, the projected volume for this year is 103 million kg of tobacco. The projected volume will be confirmed by the second round of crop estimates survey that will be concluded this week.
“This year’s demand for tobacco in the country is 140 million kgs,” TC said Wednesday.
The tobacco market regulator further said, this year, nine companies have been licenced to buy the green gold at the auction floors, including the newly unveiled Protrade Group Limited.