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Tobacco rakes in $111 million

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Felix Mlusu

Malawi’s single top export crop, tobacco, has raked in $111.6 million nine weeks into this year’s selling season, latest figures from AHL Group show.

This comes amid pessimism by some industry stakeholders that the earnings would not surpass that of last year.

Figures further show that the amount has been realised after the country has sold 67.9 million kilograms (kg) of tobacco types of tobacco at an average price of $1.64 per kg.

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The revenue represents a 26 percent growth from $88.6 million dollars realised during same time last year.

The average price on the other side is 8.6 percent higher than the $1.51 kg the leaf was fetching during the same time last season.

The revenue realised this far is only 35 percent shy of total the $173.5 million earned at the end of sale last year, while the volumes sold this far stands at 39 percent lower than last year’s total 112.89 million kg.

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The trend has prompted debate among stakeholders in the sector where some feel the earnings could rise this season evidenced by a slight rise in average prices while others project a possible drop in total income the green gold could fetch.

The government believes the country will earn more from the crop this year when compared to last year.

Ministry of Agriculture spokesperson Grecian Lungu said according to crop estimates, the country is expected to produce about 124 million kg of tobacco which is higher than last year’s volumes.

“We have seen that prices being offered on the market are much better than last year and the volumes sold thus far are just above half of what we projected to produce this year. So we anticipate more revenues than that of last year,” Lungu said.

On the other hand, President of the Tobacco Association of Malawi (Tama) Trust Abiel Kalima Banda said the earnings will not match last year’s as the output is expected to be lower than earlier projected.

“We projected way high volumes than what we have actually produced. Going around farmer communities, you find that the season is going to an end as most farmers have sold most of their tobacco. I believe in the next five weeks we will be closing the market,” Banda said.

Tobacco output has been on the decline in recent years leading to reduced earnings.

Recently, Minister of Finance Felix Mlusu indicated that the country is likely to earn more forex from Soya than tobacco this season.

Commentators fear that the future of tobacco production, just like the agriculture sector itself, remains mixed and murky.

Its share has been falling sharply in the past ten years in response to changes in prices and weather conditions, and most recently, due to the global anti-smoking campaign championed by the World Health Organisation.

In 2014, Malawi realised $361 million from sales of 192 million kg of all types of tobacco, which declined to $337 million in 2015. But output was static.

As at close of the 2018 marketing season, the country earned about $336 million against $212 million of 2017 after selling 106 million kg.

In 2019, the country sold 165.6 million kg of all types of tobacco, raking in $237 million.

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