Malawi has failed to satisfy international buyers’ demand for tobacco this year having sold 85 million kilogrammes (kg) of all types of the leaf against the required 150 million kg.
According to figures from the tobacco market operator, AHL Group, as of week 19, the country sold 84.7 million kg of tobacco, realising $181.3 million.
The earnings are also lower than the $194.9 million the country realised after selling 121.7 million kg of all types of tobacco last season.
This comes as all markets have been closed except Mzuzu Auction Floors which closes tomorrow.
The drop in volume was, however, a blessing in disguise as demand and supply forces came into force, pushing average prices to $2.14 from $1.50 last season.
AHL Group General Manager Graham Kunimba said since the appetite from the buyers was huge while the supply was low, the leaf attracted better prices.
“Next year we expect further improved prices because the cost of production will be high and they will have to balance but the industry will sit and decide and recommend minimum prices but farmers are expecting improved prices,” he said.
Tobacco Association of Malawi (Tama) Trust President Abiel Kalima Banda said a lower leaf output was expected due to harsh weather conditions.
“Apart from delayed rains, early this year we have seen two storms which swept crop fields across the country especially in the southern region so all these factors have affected tobacco output,” Banda said.
Meanwhile agriculturalist Leonard Chimwaza said the leaf is gradually losing its relevance evidenced by lowering output and revenue.
Chimwaza compared the leaf with Soya, whose production was not as involving and costly as the leaf.
“The comparison does not favour tobacco and farmers have been shifting towards legumes rather than tobacco and this trend will continue unless there should be some kind of incentives,” he said.
While buyers demanded 150 million kg, the country forecasted that tobacco output will be at 100 million kg but with the current figures, the market has failed to fulfil the forecast.
The closure of the Mzuzu Auction floor Friday will mark the end of this year’s tobacco market which opened in March.
Tobacco remains the backbone of commercial agriculture in Malawi and main cash crop and foreign exchange earner but its production has been on the downward spiral in recent years.
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.