By Kinglsey Jassi:
Malawi’s burley tobacco has a good standing on the global market, with prospects for continued rise in the next three years, Tobacco Processors Association (TPA) has indicated.
According to TPA Chairperson Moffat Gama, who is JTI’s managing director, this is due to production slump in the region, which has boosted Malawi’s burley demand as the country hopes to produce over 200 million kilogrammes (kg).
“The demand outlook is very good on the backdrop of underproduction, not only in Malawi but in neighboring countries, so there is a three-year hole that must be filled,” Gama said.
The industry players are meeting in Lilongwe to discuss market prospects with intent to build on last season’s successes.
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Gama has, however, cautioned that there should be control to avoid over-production which would distort prices.
With the country’s farmers failing to meet demand over the past four years, Gama said this presents a good demand opportunity that must be utilised as tobacco processing companies suffer capacity under-utilisation that is limiting export volumes.
“We do find our factories under-processing and there is a possibility to import tobacco from neighbouring countries and there are processes stipulated in the law and we just have to follow,” Gama said.
Tobacco Commission Board Chairperson Godfrey Chapola believes the increasing number of buyers over the years is an indication of continued demand for Malawi’s tobacco, allaying fears of a successful anti-tobacco campaign.
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He said the country needs to be aggressive to sell local burley on the global market as there is unique demand for Malawi’s burley that has less contaminants and is a good filler in cigarette manufacturing.
However, with some thorny issues still haunting the industry, the industry regulator hopes the tobacco conference will address them.
“We know that we will get to the level of production that meets demand if the prices continue to perform. A farmer is a shrewd business-person and will react to prices,” said Chapola.
At this point, Chapola disclosed that there has been a good response on expression of interest from the farmers as 53 000 growers have already registered, against 41,000 that had registered last year.
Malawi exported tobacco worth $447 million in 2023, a marginal increase from $435 million in 2022, according to the Organisation for Economic Cooperation and Development.
Meanwhile, there is a 23 percent increase in the expected tobacco volumes to 220 million kilograms of tobacco against last year’s 177 licensed volumes.
Buyers have since indicated a 12 percent demand at 212 million kg against last year’s 190 million kg when farmers only supplied 133 million kg.
In the 2024 marketing season, the country recorded a 40 percent increase in total sales, generating over $396 million up from $283.76 million in 2023 and is the record sales in over a decade.
