Tobacco rakes in $28 million
Malawi’s main foreign exchange earner, Tobacco, has raked in $28 million (approximately K29 billion) from 13.8 million kilograms (kg) of all types of tobacco sold within the first three weeks of this year’s selling season.
This is according to figures from the industry regulator, Tobacco Commission (TC).
The revenue is, however, 2,037 percent higher than the $960,000 the leaf raked in during the same period last year after the country sold about 600,000kg.
Available figures also show that on average, the leaf is fetching $2 per kg, about 38 percent higher than the $1.49 per kg average prices the leaf attracted during the same time last year.
In an interview Thursday, TC Public Relations Officer Telephorus Chigwenembe said the commission is impressed with the start of the market and that farmers are likely to make the most of their toil.
He said annual revenue from tobacco is also poised to be higher.
“We are happy with the progress of this year’s tobacco selling season because the prices offered are better, and rejection rate is almost at 0 percent,” Chigwenembe said.
But Tobacco Association of Malawi (Tama) Trust, a growers’ representative body, says despite the improvements in average prices, farmers might not make the most this season as cost of production remained high.
Tama Trust President Abiel Kalima Banda Thursday said farmers anticipate prices to go up further as the market gets to its peak.
“Farmers were not consulted on [minimum] prices. The prices do not correspond with what we spent and we also need to change some sections of how farmers access loans because some of them are costly,” he said.
This year, Malawi is expected to produce about 126 million kg of the green gold.
Tobacco remains Malawi’s top export crop and main foreign exchange earner.
But the country continues to grapple with acute forex shortage which affected almost all other sectors of the economy.
There has been glaring mismatches between forex supply and demand as the country’s imports bill stands at $3 billion compared to an export value of about $1 billion per annum.
Figures from the Reserve Bank of Malawi indicate that during the first quarter of 2023 for example, merchandise trade deficit widened to $283.5 million from a deficit of $15.7 million during the preceding quarter.
But in its recent Monetary Policy Report, the central bank expressed optimism for a possible ease in the pressure as the tobacco selling season gets to its peak.
“The reopening of main markets for the country’s major exports in the second quarter of this year is expected to improve export inflows during that period,” reads the report.
Justin Mkweu is a fast growing reporter who currently works with Times Group on the business desk.
He is however flexible as he also writes about current affairs and national issues.