As tobacco sales start Wednesday at Kanengo Auction Floors, The Daily Times has established that Malawi’s major forex earner— tobacco—continues to be smuggled into neighbouring countries such as Zambia.
The practice of smuggling is rampant in border districts such as Mzimba and Mchinji, with high-grade tobacco, especially flue-cured leaf, being the most sought after.
On Sunday, The Daily Times observed the situation for over two hours at Mbalachanda in Mzimba District.
Motorbikes were seen transporting tobacco from farms to vendors, who have set up makeshift markets at the trading centre.
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The most traded leaf was flue-cured tobacco.
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One middleman we found at the place said he buys tobacco from local farmers and sells it to Zambian vendors, claiming the prices offered are more attractive than those at Malawi’s official markets
“In terms of the high-grade leaf of flue cured tobacco, they are buying us at between K12,000 and K15,000 per kilogramme while at the auction flours, their prices are normally between 3 to 4 United States dollars, which are lower prices. So, we sell this high-grade tobacco to [people from] Zambia and we are going to send this lower grade to the auction floors in Mzuzu,” he said.
Another vendor, who had piles of flue-cured tobacco at his shelter, said they prefer dealing with Zambian vendors because they pay cash, unlike at the auction floors, where payments are sometimes delayed by up to a month.
While acknowledging that smuggling was illegal, he shifted blame on the Zambian vendors who transport the leaf to their country.
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“Farmers prefer selling their leaf to us than at the auction flours because they [farmers] dictate their prices while at auction flours, they impose prices on farmers,” he said.
Further, the vendors said selling to Malawi official markets comes with transport costs, which they described as high.
“Transporters are now charging K40,000 per bale due to poor road network. That makes selling here a cheaper and easier option,” he said.
Tobacco Commission spokesperson Telephorus Chigwenembe asked for ample time before he could comment on the issue when contacted Monday.
Parliamentary Committee on Agriculture Chairperson Sameer Suleman suggested the fixing of competitive prices between the auction floors and the parallel market.
Suleman also suggested that the Malawi Police Service, in collaboration with soldiers from Malawi Defence Force, should help in patrolling the borders and dealing with the smugglers.
“Sensitisation should be done among buyers and vendors, who have to appreciate the importance of selling tobacco within the country. Police should also play an active role by warning vendors who are in the business of tobacco smuggling,” Suleman said.
TC recently said this year’s trade demand is higher than expected production volumes, thereby creating an opportunity for healthy competition.
A preliminary trade report shows that demand is pegged at 213 million kilogrammes of the green leaf.
