Tobacco market started on a low note at the Limbe Auction Floors Monday when 52 percent of the leaf brought to the floors was rejected with the rest attracting low prices.
This follows another poor start of the Lilongwe and Chinkhoma floors last week where the no-sale rate hovered around 32 percent and 58 percent, respectively, on the opening day.
A snap view on the Limbe market yesterday indicated that most of the leaf was being traded at around US$0.80 per kilogramme while a few bales were bought at around US$1.20 per kilogramme.
There were wide disparities in both prices and rejection rate at the contract and auction markets on the first day of sales at the Limbe Auction Floors.
Prior to the opening of the market, Minister of Agriculture George Chaponda warned the tobacco buyers who he said were rejecting the leaf due to their anticipation of a larger crop than the trade requirement.
Citing last week’s experience at Lilongwe and Chinkhoma floors, Chaponda told the buyers to desist from rejecting the commodity with no reason saying denying the crop before exhausting their requirement was unfair and appeared like they want to depress the price so that they buy more than they require.
“I expected you to be buying the tobacco without any resentment at all,” Chaponda urged the buyers at the opening of the floors.
To his surprise, a few minutes after the official opening, the rejection rate remained high.
Reacting in an interview after touring the floors, Chaponda rated the move as a plot by some buyers to get done with auction trading.
“I know that the buyers would like to kill the auction trading but we, as a government, would like to continue promoting the auction trading because in the current scenario we still find that the buyers cannot manage to buy all the tobacco under contract, ” said Chaponda.
Meanwhile, Tobacco Control Commission (TCC) has expressed optimism that the market will stabilise in the coming weeks as the market is now flooded with tobacco brought forward by the intermediaries.
TCC Chief Executive Officer Albert Changaya told journalists that in the coming two weeks, high quality leaf would start flowing into the market.
“Quality especially on the first day has been poor because it has been characterised by mixtures in one bale. The outlook would be better as this time most of the markets are dominated by the intermediate buyers,” said Changaya.
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