By Kingsely Jassi:
Malawi is projected to have produced 154.7 million kilogrammes (kg) of all types of tobacco this year, the third and final round crop estimates show.
This puts to rest fears of oversupply, as the estimated output is about 16 million kg shy of the 170 million kg national trade demand.
The volume is also a drop from the second-round projection of 196.6 million kg.
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Industry regulator, the Tobacco Commission (TC), says producing below international market demand would lessen pressure of offloading the leaf without affecting prices.
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TC spokesperson Telephorus Chigwenembe said the estimates were revised.
“There are three factors that led to the revised estimates: The first was diseases that worsened after the second-round estimates had already been conducted; excessive rains that caused leaching, specifically in Kasungu District and surrounding areas; as well as post-harvest losses, especially in Mzuzu,” Chigwenembe said.
On its part, Tobacco Association of Malawi (Tama) said the earlier estimates affected buyers’ behaviour as they offered low prices.
Tobacco-buying companies lamented the back-to-back oversupply of tobacco, saying it distorts the global market as Malawi has a great influence, being the largest producer of burley.
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Meanwhile, at week 17, the market has sold 135 million kg of all types of tobacco, realising $269.8 million at an average price of $2 per kg.
This year, the market’s performance is dismal, comparatively.
During the corresponding period last year, about 182 million kg of tobacco were sold, raking in $464.8 million at an average price of $2.55 per kg.
The market has also been largely characterised by a high rejection rate this year, seen at 52 percent as at week 17.
Meanwhile, TC says it has tightened loose ends in the production system, aiming to flush out unlicensed growers, by launching a Know Your Grower exercise that will also help in traceability of every tobacco leaf produced.
