The Tobacco Commission (TC) has engaged potential tobacco buyers from Serbia as one way of strengthening competition among the country’s group of buyers for the green gold.
The development comes at a time earnings from the crop remain far from impressive, despite the country producing less of the green gold than demanded by international buyers.
The situation has been partly blamed on weak competition among buyers, with the Malawi market having only nine buyers.
Briefing journalists in Lilongwe when he unveiled the potential buyers, TC Chief Executive Officer Joseph Chidanti Malunga said it is the wish of his organisation to see tobacco growers getting improved earnings from the crop.
Malunga said one way of ensuring that the crop attracts better prices is by making sure that the market has more buyers.
“We want more buyers especially on the auction side of the market. Talking to them, there are strong indications that they could come on the market this year,” Malunga said.
Tobacco Industry of Bujanovic Chairperson Dragan Stankovic said the Serbians are keen on starting buying tobacco from Malawi this year.
Stankovic said, in the long term, the Serbians would like to set up a cigarette-making factory in Malawi.
“In most of the countries in Europe, high taxation is applying on cigarette products and therefore there are high prices. That is why we are looking for competitive raw materials so that we can be competitive on the market.
“This is the reason we came to Malawi because Malawi has various types of quality tobacco so that we can compete in buying the raw material,” Stankovic said.
He hailed the support given to them by the Malawi Investment and Trade Centre in ensuring that they move with speed in setting up shop in Malawi.
Tobacco remains Malawi’s top single foreign exchange earner. However, over the years, earnings from tobacco have been nose-diving, partly due to the global anti-smoking lobby coupled with the emergence of e-cigarettes.
Last year, Malawi produced 112.89 million kg of tobacco and earned $173.5 million (about K130 billion) which was 27 percent below the $237 million realised in 2019.
This year, the country has produced 122 million kg which is far below the 132 million trade requirement by international buyers.