The Tobacco Association of Malawi (Tama) says it expects a mixed marketing season for the green gold this year.
In a telephone interview, Tama president Reuben Maigwa said the season would be characterised by both fortunes and misfortunes that would make it difficult to to determine earnings to accrue to local farmers.
Apart from unstable weather patterns, Maigwa said the recent announcement by the regulator, Tobacco Control Commission (TCC) that demand for tobacco has this year fallen by 12 percent has also sent shock waves among growers.
TCC announced last week that demand for the green gold has this year slumped to 158 million kilogrammes from 179.1 million kilogrammes as the buyers still have some tobacco bought last season in stock.
Malawi produced over 192 million kilograms of all types of tobacco last year which was rated as overproduction by some of the buyers.
Analysts have argued that this would be tricky to the growers in the event that farrmers produce more tobacco than the estimated demand this year.
In a related development, TCC says the country’s tobacco marketing season might commence a bit late depending on the outcome of the second field assessment.
TCC says it expects the second field assessment to start next week Monday.
TCC Chief Executive Officer Albert Changaya said it is difficult to say when exactly the market will open this year.
“You are aware that for the past weeks, the country has been experiencing a dry spell. It is only last week that some parts of the country received some rains. A team will be sent next week to assess what is on the ground. It is only then, that we can be able to say when the market will open,” said Changaya.
He, however, said possibilities are high that the marketing season might open in mid-April.
Commenting on the outlook two weeks ago, Changaya said despite the drought that some parts of the country experienced, there is still hope for an increase in production levels.
He said production has been affected mostly in some parts of the Southern Region in comparison to the the Central and Northern regions “However, we were still thinking that quality and quantity may be affected especially in the southern region where we have been hit hard by the dry spells. But it now looks like the crop is picking up now so the estimates would give us an accurate outlook,” said Changaya.
The Reserve Bank of Malawi (RBM), first Monetary Policy Committee (MPC) meeting for 2016 held in Lilongwe last week cited the commencement of the agriculture marketing season as one area that will help stabilise the kwacha in the short term.
“Despite depreciating sharply against currencies of major trading partners since July 2015, the kwacha is expected to stabilise due to the opening of the new agricultural marketing season,” reads the MPC statement.
