Malawi Tobacco Market Closed

The country's tobacco marketing season has finally closed after 37 weeks of trading with US$275.7 million earnings less than that of last year.

The market has been closed with tobacco fetching US$1.42 per kilogram as compared to last year's US$1.75 per kg.

This year's marketing season revenue has dropped by 18 percent with total amount realized marked at US$61 million. In 2015, Malawi realized US$337 million from the green gold after 27 weeks of sales.

The drop in earnings has been attributed to poor prices and high rejection rates which peaked at as high as 98% at some point during the trading of the crop.

This year's marketing season was extended to December, exceeding the normal sales closing months of September and October.

Auction Holdings Limited (AHL) Corporate Affairs Manager, Mark Ndipita said this year's selling season has absorbed a lot of tobacco than in 2015 though with less earnings.

Tobacco Control Commission (TCC) has however attributed dangling of the country's green gold prices for past three years and 2016 inclusive marketing season to overproduction.

Overproduction of 30 million kilogram yearly has been registered mainly on burley tobacco which buyers are unable to fit in with their buying power. For instance, this year buyers were looking for 132.5 million kilograms against an estimated local production of 165 million kilograms.

As a result tobacco buyers have already given 151 million kilogram ceiling of all types of tobacco in the next season.

"Normally, the market closes after 24 or 25 weeks of trading. Overproduction necessitated the extensions of the selling season. We ended up with 175 million barley alone against the trade requirement 132 million, meaning that 43 million kilograms were in excess", observed TCC Executive Director Albert Changaya.

This has prompted TCC to start enforcing strict quotas on farmers to remain within the required volume of tobacco in 2016/2017 growing season.

The new system which is dubbed as Farmers Management System (FMS) will require growers to provide information about their fields when applying for quota licenses. Enditem

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