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Tobacco earnings hit $166.4 million

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Earnings from tobacco reached $166.4 million at the end of week 16 of sales, figures from market operator, AHL Group show.

Average price for the leaf has been rising, recorded at $2.12 per kilogramme (kg).

The prices have picked up by 30.9 percent when compared to the $1.62 recorded during the same period last year while the earnings have dropped by 11.7 percent compared to $188,571,026.13 realised at 16 weeks of sales last year.

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The traded volume has also taken a dive, recorded at 78,393,624 kg at the end of week 16 representing a 32.5 percent decline compared to the 116,190,357 kg recorded last year.

AHL Group maintains that the development is a result of market forces of demand and supply.

Meanwhile, the market is nearing the end with chances of a lower output and revenue this year compared to last season.

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Tobacco Association of Malawi (Tama) Trust President Abiel Kalima Banda hinted that the first market to close will be Chinkhoma which stop receiving tobacco Tuesday.

“The plans are to close Chinkhoma market on 20 July and the other markets will follow in coming weeks but a proper announcement will be made. This shows that farmers have exhausted the tobacco they had and we are good to close the markets,” Banda said.

Tobacco Commission spokesperson Telephorus Chigwenembe said actual dates will be deliberated in the stakeholders meeting.

“I cannot conclusively say that Chinkhoma will close on July 20, however, all stakeholders will meet and agree on the actual dates of closing the markets according to how much tobacco they are receiving,” Chigwenembe said.

Tobacco production toppled this year owing to late on set of rains last year which affected the crop in the nursery.

After second round crop estimates, it was anticipated that the country may produce 101 million kg of tobacco. Recent market trends, however, point to the country producing even less tobacco than anticipated.

The development also affects the Malawi economy as the crop is relied upon as the major source of foreign exchange.

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