• December 2, 2022 3:53 pm

Tobacco prices excite farmers

Mar 31, 2022

By Malawi Exclusive

As Auction Floors open on high note
Optimism coupled with buoyancy characterized the opening of the 2022 tobacco marketing season, with prices hitting as high as $2.50 (about K2,060) per kilogram (kg) on flue cured tobacco sold on contract farming and $2 (about K1,650) for burley tobacco, to the delight of tobacco growers.

And the excitement was also evident on the floors following the coming on board of a new tobacco buying company, Protrade, which has brought the total number of tobacco buying firms on the market to 10.
Protrade becomes the first 100 percent Malawian owned company to buy tobacco on the local green gold market.

the company targets to buy about 10 million kilograms of green gold in its first year, before growing the volumes in subsequent years.
The 2022 marketing season was officially opened by President Lazarus Chakwera at a grand event that traditionally takes place at Kanengo in Lilongwe.

Random interviews with tobacco buyers before Chakwera opened the market revealed that growers are expectant of good tidings this year on account of the expected higher prices due to the expected interplay between supply and demand for the leaf on the market.

Said Edward Chitambe from Mponela in Dowa: “I am so pleased to see these opening prices fetching the leaf. It’s completely different from last year. If this persists, most of us farmers will reap from our sweat.”
Malawi has this year produced 103 million kilograms of all types of tobacco against a demand of 154 million kgs, creating a deficit of 51 million kgs.

As such, it is expected that tobacco merchants will scramble for the leaf dangled on the market hence providing higher than expected prices.
Taking it to the podium later, Chakwera reminded Malawians that tobacco farming is serious business, stressing that “it must never be treated lightly or taken for granted by anyone.”

“In fact, even if you are not involved in tobacco farming, but you live in this country, you are a beneficiary of tobacco farming. This is because tobacco farming is our biggest earner of forex, the very forex that all importers use to bring in goods from abroad for sale within Malawi,” he said.

He said his administration has been working tirelessly to retain tobacco markets for the country, including lobbying foreign companies that have made fortunes from the sale of products made from Malawi tobacco.

On compliance issues, Chakwera reminded all stakeholders in the tobacco value chain to play their role and work together for the nation to conduct tobacco business in a manner that complies with international demand.

Speaking earlier, Minister of Agriculture Lobin Lowe bemoaned the tendency of tobacco buyers to offer good prices only during the opening season and offer poor prices subsequently.
On his part, board member for AHL Group Jolly Nkhonjera said the company, which offers a tobacco marketing platform, is ready for the 2022 season, promising to provide excellent services to all stakeholders while adhering to the Covid-19 preventive measures.

He said AHL also expects that tobacco farmers would fetch better prices due to reduced crop size as a result of the late onset of rains and heavy rains that destroyed some of the crops.
This year’s official opening of the tobacco marketing season has come two and half weeks earlier than that of the 2021 season.

According to Chakwera, this has been necessitated by the fact that the government needs to cushion tobacco growers against the financial challenges they are facing during this transitional period when compliance with standards becomes most difficult.
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