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Tobacco prices tumble this year

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Lobin Lowe

At a time every Malawian expected improved prices of tobacco due to low supply of the green gold on the market, tobacco growers have realised less earnings in the first week of selling the crop this year as compared to last year, figures from tobacco marketer, Auction Holdings Limited, show.

For example, on the first day of sales on April 20 last year, tobacco sales averaged $1.72 per kilogramme (kg) but, this year, the average price was recorded at $1.35 per kg, representing a 21.5 percent fall in price.

On the second day of trading last year, which was April 21, the green gold also attracted an average price of $1.72 per kg as compared to $1.42 per kg on the second day of trading this year.

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On the third day of trading last year, which was April 22, the leaf fetched an average price of $1.65 per kg as compared to an average of $1.29 per kg recorded on Wednesday.

Cumulatively, after three days of trading this year, tobacco prices have averaged $1.35 per kg as compared to the three-day average price of $1.68 per kg last year.

Comparing the average prices for the first three days of trading this year to last year, there are indications that tobacco prices are 19.6 percent lower this year than last year.

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In terms of earnings from the green gold, as at the end of Wednesday, the country had cumulatively realised a total of $330,094 as compared to cumulative earnings of $2.283 million realised last year.

Tama Farmers Trust President Abel Masache Kalima Banda Thursday said it was disappointing to note that prices for the green gold are lower than those of last year despite the laws of demand and supply pointing towards better prices this year.

According to Kalima Banda, if the situation persists, many growers are likely to drop tobacco production this year.

He said, following the drop in production, tobacco farmers were expecting better prices this year than last year.

“To say the truth, it is very painful,” Kalima Banda.

The tobacco farmers’ chief said, unlike last year, the crop was this year produced under tough conditions such as using very expensive fertiliser as well as paying too much money to keep tobacco nurseries alive due to the late onset of rains.

“It clearly shows that whoever was coming up with the minimum prices got his mathematics wrong,” Kalima Banda said, adding that the authorities needed to intervene in the matter before the situation got out of hand.

Speaking in Lilongwe last Thursday, Agriculture Minister Lobin Lowe said buyers were looking for 154 million kg of the green gold against a projected supply of 103 million kg.

Speaking when he opened the 2022 tobacco selling season, President Lazarus Chakwera said he was encouraged with the start of the market but expressed hope that buyers would do better by offering even better prices as the market progresses.

During the opening of the market last week, a group of tobacco growers asked Chakwera to ensure that buyers did not lower prices once the President left the auction floors.

The growers noted that experience had shown that buyers normally offer better prices when the President is around and shift to lower prices when the Head of State and Government leaves the premises.

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