Tobacco farmers body, Tobacco Association of Malawi (Tama) Trust, has indicated that it expects prices offered by buying companies to reflect the crops production gross margins and quality of the leaf this season.
This follows a recent announcement by the Tobacco Commission (TC) that the crops marketing season will open on Monday, April 15, and not Wednesday as earlier announced.
It also follows President Lazarus Chakwera’s engagement with the country’s tobacco buyers at Kamuzu Palace in Lilongwe last week.
In an interview Wednesday, Tama Trust President Abiel Kalima Banda said this year’s crop has been produced under extremely tough conditions characterised by an extended dry spell.
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He said the development forced the growers to invest more money into expanded irrigation just to keep the crop alive.
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Banda added that the expectation of the growers has also been driven up by the fact that supply will be lower than demand this year.
“The growers have invested everything they had into production of the crop this year. At the start of the growing season, nobody had anticipated such an extended dry spell. The only way to keep the tobacco crop alive was through irrigation. It is our hope that the growers will take this into consideration when the market opens.
“From recent stakeholder deliberations on the prices we agreed that the minimum price for no grade tobacco should be maintained at $1 per kg but this is poor leaf and there is not much of that because we did not experience excess rains. On the other grades we expect good prices, for example, a grade that attracts $2.85 per kilogramme (kg) after competition should come to $3.60 to $3.80,” Kalima Banda said.
He added: “We expect the buyers to scramble for the leaf this year. Otherwise, it will be a disaster.”
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During the presidential interface, Chakwera demanded a sanitised value chain that is driven by best practices from farmers, market operators, grower associations and all interested parties.
“This we are doing to ensure that our hardworking farmers earn a decent income from their season-long labour. Among other interventions, we will use relevant government agencies to protect the market through close monitoring and elimination of illegal cross-border trading of the crop.
“We are also boldly reinforcing the new Tobacco Industry Act so that it complies with agenda of upscaling production, marketing and value addition of the crop, this being a springboard to a stronger economy that anchors sustainable development,” Chakwera wrote on his Facebook page after the meeting.
A second-round crop estimate survey by the Tobacco Commission revealed an anticipated green gold volume of 140 million kgs against an international demand of 170 million kgs.
During the 2023 tobacco marketing season, Malawi earned $282.62 million after selling 120 million kg of tobacco at an average price of $2.35.
Currently Malawi is grappling with foreign exchange supply seen at 0.57 months of import cover in February.
