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Uncertainty rocks tobacco marketing

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For decades, the country’s major foreign exchange earner has been tobacco. However, with increasing anti-smoking lobbies, the demand for tobacco has been decreasing in the past five years.

As this is happening, over one million farmers in the country depend on tobacco as their source of income. The entire nation also depends on these farmers to sustain production of the green gold to drive the economy, which looks to tobacco as a major foreign exchange earner.

But this year, the tobacco market has faced record challenges with the market going over its traditional 26 weeks of trading amid high rejection rates and low prices that threaten to cripple the sector even further.

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In the 2015/16 season, Malawi alone over produced burley tobacco by over 30 million kilogrammes resulting in a pro-longed marketing season.

The over production has seen most tobacco growers failing to sell even a single bale since the market started in March this year.

The normal tobacco marketing season in the country is from March to July.

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Times crew took time to visit some of the growers and transporters in Lilongwe, to hear their views on the season and future of tobacco in the country.

Msundwe trading centre

The first stop was at Msundwe Trading Centre along Mchinji road about 20 kilometers from Lilongwe city.

A visit here reveals that the trading centre alone has about six tobacco depots. Each depot is holding a minimum of 300 bales of tobacco and a maximum of 3,000 bales. A bale of tobacco weighs 100 kilogrammes which simply means using simple mathematics, Msundwe trading centre holds approximately one million kilogrammes of tobacco.

There are many other trading centres like Msundwe that have warehouses holding tobacco belonging to farmers across the country since April this year.

Here, we incidentally met a group of 12 growers who had travelled all the way from Chitukula about 15 Kilometers from Msundwe to collect their tobacco from a tobacco grading warehouse which has been holding their tobacco waiting to take it to the auction floors since April.

The farmers told this reporter they are contemplating selling their tobacco to vendors since the auction has failed them and they have no other option.

Harold Kasakula from Bowa village Traditional Authority Chitukula in Lilongwe, said he brought his tobacco bales at Witika Tobacco Grading Company at Msundwe on May 25, 2016 but up to now not a single bale has been taken to the auction.

He said, they were told to pay for booking at the Kanengo auction floors, about K3,200 per bale and he has spent over K102, 000 for his 11 bales since May.

Thauzeni Ngalande from Bowa village, said as a group, they agreed to sell their tobacco to vendors as they cannot sale through the auction.

“As of now, I have not sold any of my six bales and I am failing to prepare for this year’s farming season because I do not have any money to use to buy farm inputs.

“The challenges we are facing back home are that the tenants we hired are frequently reporting us to police for not paying their dues. We owe the tenants money for almost a year as the agreement is that they get their pay after the tobacco is sold,” he said.

Another grower, Fadrick Doctor from Mkoloweko village in Lilongwe said there are a lot of problems that the farmers are facing since the market started in March.

“I am a contract farmer and surprisingly, we are being told that the buyers have reached their limit and are no longer buying tobacco.

“My worry is what I will do with the remaining bales of tobacco. It is a pity that after paying back the loan I got from the company, that is when they are telling us that they have stopped buying tobacco because they have reached their limit,” Doctor said.

Grading warehouse

Master Manuel is overseer at M’mwera Tobacco grading warehouse.

He said the warehouse started receiving tobacco bales from farmers in April this year.

“So far, only 500 bales have gone through the auction and we have over 600 bales in the warehouse, but, 1,000 other bales are still at different depots. We are able to deliver about 50 bales once in a month at the auction, due to booking problems.

“The delay faced at the booking are giving us a hard time to explain to the growers why we are still keeping their tobacco in our warehouses,” said Manuel.

Transporter

Hanif Khan is a tobacco grower and a transporter from Msundwe, he says the situation is really worse at the moment for the tobacco farmer.

He says as a transporter and grower, he has lost a lot in terms of revenue.

“To offload at the auction floors it takes about a month and this is time consuming and as a business person I have lost out as I have been idle for a long time. it is really pathetic what the farmer is going through right now, as most growers rely only on tobacco and not other crops they are facing hunger in their homes,” Khan said.

Kanengo

Here, the case is not different and we missed by a whisker what could have been a fight between a grower and a transporter.

At the truck parking area, we found about 22 trucks that have been there since May. The load ranged from 50 bales to 1,000 bales of tobacco, giving us an estimate of 1.5 million kilogrammes of tobacco which is in the hands of transporters and yet to get to the auction.

Kangachepe from Chitseko village is the grower who wanted to beat up his transporter.

He said he was angry because his tobacco is not yet sold and his family is struggling to make ends meet.

“I am here at Kanengo to see for myself what is happening to my tobacco bales. I sent my bales first week of July, but up to today, the vehicle which transported my tobacco has not offloaded yet.

“The system here favours only those with money. Our transporters cannot afford to pay the officers at the offloading bay hence it means we have to wait longer,” he said.

Kangachepe also noted that the problem at the auction is the introduction of contract farming.

“The buyers think the only tobacco that is worth it is from contract and not auction. This has to change, because the tobacco is the same and it is grown by us farmers,” he said.

Transporter at Kanengo

Mwale Damiano i s t h e transporter who was about to be beaten on the day.

He said the problem they are facing not to offload is booking.

“I transported tobacco bales from Chisepo village on July 14, 2016, but up to date, I have not yet offloaded hence one of the farmers wanted to beat me up for holding his bales.

“The problem is booking, we are being asked to pay for booking. The charges are different depending on who is in charge. We are being asked to pay within the ranges of K5,000 per bale to K20,000 per bale,” he said.

TCC Comment on the matter:

Tobacco Control Commission (TCC) Deputy Chief Executive Officer David Luka described this year’s tobacco season as a distressful one.

He said the season has faced many challenges due to the excess tobacco that came about due to over production.

“The commission jointly with the ministry of agriculture is working hard to make sure that the tobacco which has not been sold to date should be sold.

“It is not an easy thing to arrive at the solution but as the commission and the ministry we will try our best to make sure that all the tobacco is sold,” said Luka.

He further said the closure of the market will depend on the disposal of the tobacco which is currently in the hands of farmers.

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