Malawi Tabacco Market News – 2019 TOBACCO MARKET DOWN BY 29.4%
From reaping $336 million last year, the tobacco market season has posted total sales of $237 million at an average price of $1.43 this year, representing a profit drop of almost 30%.
However, Tobacco Commission (TC) Chief Executive Officer, Kaisi Sadala, was positive about the future of the tobacco industry. “This is why the Government through the TC advocates crop size management by ensuring that we align supply to demand in addition, the industry is repositioning itself to be compliant to global dynamics so that our crop remains competitive,” Sadala said.
During the close of the 2019 tobacco market, Auction Holdings Limited (AHL) Group Public Relations Manager, Teresa Ndanga, attributed the reduced proceeds this year to lower average prices and a higher no-sale rejection rate. According to the Reserve Bank of Malawi (RBM), the closure of the tobacco selling season will not be consequential to the Malawi kwacha exchange rate stability. The latter claim, however, follows reports that have attributed the stabilisation of the local currency to the tobacco sales themselves.
This market season saw tobacco farmers call for the abolishment of contract marketing, stating the system is not beneficial to them. The farmers’ coordinating chairperson in Mzuzu, Joasi Mulungu, described the system is exploitative as growers are forced to get hefty loans that leave nothing for them in the end. “Our major concern is the contract farming. It will be good if we only use the usual auction system.