Tobacco prices tumble
Two weeks into this year’s tobacco selling season, farmers have started complaining about high rejection rates and low prices the crop has started to fetch on the market.
At the start of the market, buyers were offering $2 for a kilogramme of the green gold.
But the farmers claim this offer was only available during the first week of the market and that prices have now gown down to $1.20 cents as the highest price.
The farmers could not hide their frustrations to The Daily Times arguing that the government is not safeguarding the interests of tobacco farmers who depend on the crop for their sustainability.
They went on to decry the increasing levels of bales being sent back from the market for poor quality which they claim is a strategy buyers are engaging to buy the crop at a giveaway price later.
One farmer we spoke to in Lilongwe said that even after his bales were bought at a price of $1.20, he will not be able to recover the money he invested in producing the tobacco.
“The trend we are seeing on the market puts middlemen at an advantage because they did not invest as much as we did and they will be able to make profits while we will struggle to pay back loans we took for tobacco production,” the farmer said.
He went on to say that such situations will force farmers to sell their maize to cover up the losses.
Statistics from tobacco market authorities indicate that the rejection rate is still low ranging between three to 10 percent.
According to statistics from the Tobacco Control Commission, 3.7 million kilogrammes of tobacco has been sold so far, raking in $6.1 million in the first two weeks of tobacco sales.
Currently, only Kanengo and Chinkhoma Auction Floors are open for trading.
Limbe Auction Floors is expected to open on Tuesday after the opening was rescheduled last week.
Some sources claim that the market failed to open because farmers were deliberately holding their tobacco in anticipation of prices picking up on the market.