Tobacco market regulator, Tobacco Commission (TC) has rated as a big relief a decision by the United States (US) government to soften further on its ban on tobacco imports from Malawi.
The US announced on Monday that it would allow Limbe Leaf Tobacco Company to be exporting the leaf, Malawi’s major export crop, to the US.
In November last year, the US Customs and Border Protection (CBP) issued a Withhold Release Order (WRO) against entry of tobacco or any tobacco related material from Malawi into the country on suspicion that was produced using child and forced labour.
Limbe Leaf Tobacco Company is second to be allowed to export Malawi tobacco to the US after Alliance One was also cleared in June.
In a statement CBP said it has modified the order effective July 31, 2020.
It says the CBP modified the WRO based on a rigorous evaluation of Limbe Leaf Tobacco Company social compliance programme and efforts to identify and minimise the risks of forced labor from its supply chain.
In the statement, Executive Assistant Commissioner at US CBP Office of Trade, Brenda Smith, said the actions produced evidence that sufficiently supports Limbe Leaf Tobacco Company claims that tobacco from its farms is not produced and harvested using forced labor.
“This modification demonstrates the power of WROs to induce positive change in US supply chains. CBP will prevent any products subject to a WRO from entering the US until the manufacturer submits proof that there is no forced labor in its supply chain,” Smith said.
Reacting in an interview, TC Chief Executive Officer, Kaisi Sadala, said modification of the order would allay fear for lost markets for the green gold.
This is excellent news for Malawi as it gives hope for Malawi tobacco [industry]. We continue to engage the government with a view to addressing outstanding concerns that resulted in the imposition of the WRO,” Sadala said.
Meanwhile the commission has announced that Chinkhoma Auction floors will close on 14 August. It becomes the second tobacco market to be closed this season after Limbe Auction floors.
By far, tobacco remains Malawi’s top foreign exchange earner, although its share has been falling sharply in the past ten years in response to changes in prices and weather conditions, and most recently, due to the global anti-smoking campaign championed by the World Health Organisation.
In 2014, Malawi realised $361 million from sales of 192 million kilogrammes (kgs) of all types of tobacco, which declined to $337 million in 2015. But output was static.
As at close of the 2018 marketing season, the country earned about $336 million against $212 million of 2017 after selling 106 million kgs.
In 2019, the country sold 165.6 million kgs of all types of tobacco, raking in $237 million.