Tobacco sales at the Limbe auction floors have started on a rather poor note with some farmers expressing dissatisfaction with the prices.
The lowest tobacco was being sold was at 80 cents with the highest at $1.70.
However contract farmers were smiling as their tobacco fetched quite good prices: $1.10 as minimum and highest at $2.45 while wrapped tobacco used for making cigars was fetching around $4.
Agriculture minister Joseph Mwanamvekha said the market had started very well considering that buyers are paying according to the quality of leaf.
He said the leaf being sold is the lower leaf hence the moderate quality.
“We need take into consideration that pricing relates to quality of the tobacco; most of the leaf which is here now is lower leaf as such the quality is not that up to standard. We expect that the process will improve as more tobacco continues to come to the market,” he said.
Mwanamvekha said government’s anticipation is that this year tobacco sales may go well.
“This year we anticipate to have better prices for three reasons; one because of low quantity; many farmers have not grown tobacco this season as such since there’s less commodity and we expect competition from buyers, secondly the cost of production this year has reduced for the farmers because of the increase in the minimum wage and thirdly due to inflation,” he said.
Tobacco production for this year is pegged at around 148 million kilograms against a demand of 171 million kilograms which is almost a 30 million kilogram deficit.
According to Mwanamvekha, 80% of this tobacco will come from farmers on contract and 20% from individual producers.
Hopes are high over this year’s tobacco market after the country realised $5.7 million dollars from sales of the green gold in the first week.
AHL Group has indicated that the earnings were from 4.4 million kilogrammes of tobacco sold through the Lilongwe and Chinkhoma Auction floors at an average price of $1.30.
Mark Ndipita, AHL Group Corporate Affairs Manager, said the development means volumes sold and proceeds realised this year in week one are higher compared to the amount earned during the same period last year.
“In the 2017 marketing season, we sold 1.3 million kilogrammes realising $1.8 million at an average price of $1.35 per kilogramme,” he said.
But, although more tobacco has been sold in the period under review, prices offered for the leaf in the first week of marketing were better in 2017.
Now, expectations are high that the country will realise more from tobacco sales this year owing to low supply against a high demand for the green gold.
Tobacco Control Commission (TCC) earlier indicated that Malawi has this year produced 147.8 million kilogrammes of tobacco against a demand of 171 million kilogrammes.