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Fingers crossed on leaf earnings

As it rakes in $155 million

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Gracious Lungu

Stakeholders in the tobacco industry are optimistic that earnings from tobacco, Malawi’s top export crop, could be higher this season than last year.

Latest figures from market regulator, the Tobacco Commission (TC), show that the country has realised $155,189,432.22 in 12 weeks of tobacco sales.

This follows the sale of 94,357,341 kilogrammes (kg) of all types of tobacco at an average price of $1.64.

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It represents a 31 percent and 20 percent increase in revenue and volume, respectively, when compared to the $118,648,038.26 realised and 78,319,585 sold during the same period last year.

However, the recent statistics show that the earnings are only 10.5 percent shy of what the country realised from tobacco sales the entire season last year.

At the end of the 2020 season, tobacco raked in $173.5 million from the sale of 113 million kg at an average price of $1.54.

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In an interview, Tobacco Association of Malawi (Tama) Trust Chief Executive Officer Nixon Lita said the country is likely to go past the 2020 tonnage sold and earnings.

“Average prices of all types of tobacco this year are above those of 2020. Rejections have stabilised at around 30 to 40 percent for auction market which is still high but we are expecting further drop as buyers are still interested in more tobacco knowing production is below demand,” Lita said.

In an earlier interview, Ministry of Agriculture spokesperson Grecian Lungu said, according to crop estimates, the country is expected to produce about 124 million kg of tobacco which is higher than last year’s volumes.

“We have seen that prices being offered on the market are much better than last year; so, we anticipate more revenues than those of last year,” Lungu said.

Tobacco production has been on the decline in recent years translating into reduced earnings from the same.

However, the crop remains the country’s major source of foreign exchange.

Recently, Minister of Finance Felix Mlusu indicated that the country is likely to earn more forex from Soya than tobacco this season.

Commentators fear that the future of tobacco production, just like the agriculture sector itself, remains mixed and murky.

Its share has been falling sharply in the past 10 years in response to changes in prices and weather conditions and, most recently, due to the global anti-smoking campaign championed by the World Health Organisation.

In 2014, Malawi realised $361 million from sales of 192 million kg of all types of tobacco, which declined to $337 million in 2015. But output was static.

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