The second round of tobacco estimates published by the Tobacco Commission (TC) on Tuesday have shown that tobacco production is expected to shrink to140 million kilogrammes (kg) this year.
This represents a four percent drop when compared to the 146 million kg projected during the first-round crop estimates last month.
It further illuminates a 17 percent increase in production from the 120 million kg sold during the 2022-23 marketing season.
“The latest report attributes the decrease in the projected production from 146 million to 140 million kilogrammes to prolonged dry spells in most parts of the country and poor establishment and performance of some Dark Fire Cured tobacco in the Northern Region.
- Advertisement -
“The report of the first nation-wide survey attributed the projected improved production to increased hectorage due to good prices offered in 2023, increased number of growers, increased sponsorship and availability of inputs,” the statement reads.
- Advertisement -
TC Public Relations Officer Telephorus Chigwenembe said the commission is consolidating figures of the current demand for tobacco, which will be announced soon.
“Our technical guys are still engaging some of the buying companies but we could be looking at the 170 million kg which was last year’s demand as well, but a concrete figure will be provided soon,” Chigwenembe said.
This means that at 140 million kg tobacco production, the country is 17 percent shy of the crop’s demand.
In an earlier interview, President of Tobacco Association of Malawi (Tama) Farmers Trust, Abiel Kalima-Banda, said the volumes could have been high if not for the dry spell.
- Advertisement -
“We have had a good season, all the supplies were available in good time, especially for farmers under contract. For farmers that planted in November, the crop is well and good but for those who planted in January the crop coincided with the dry spell and most of these fields were not included in the assessment.
“We anticipated an increase in the number of farmers interested in tobacco production, which we have witnessed, and we believe, with good prices on the market this year, that number will be maintained and eventually increased to boost production, ” Kalima-Banda said.
Acting President of the Economics Association of Malawi (Ecama) Bertha Bangala- Chikadza said the development will culminate in increased foreign exchange earnings from the crop.
“This increase of 21 percent is huge and we should expect a significant impact in foreign exchange inflow into the country. However, we still need to diversify more in terms of exports to increase the amount of money we get from exports to stabilise the foreign exchange reserves,” Bangala-Chikadza said.
Another economist, Greenwood Nyirenda, while expressing skepticism on the figures on account of weather-related eventualities, said it could be significant to impact the economy.
“Assuming that we have good prices on the market, there will be some significant earnings from the increased volumes of tobacco. However, critical remains the fact that we need to check our appetite for imports because even the impact from this increase in production will not be enough for our imports.
“For example, our fuel import bill alone cannot be satisfied by proceeds from tobacco and then there is fuel and drugs and other essential imports. We simply need to export more and diversify our economy,” Nyirenda said.
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.
Tobacco is Malawi’s main export crop. This year’s tobacco selling season is expected to commence on April 10 2024 stating with Chinkhoma market in Kasungu District.
Currently, Malawi is grappling with foreign exchange supply seen at 0.57 months of import cover in February.
