Poor quality forced buyers to reject up to 50 percent of the tobacco growers offered for sale and give even lower prices for the accepted leaf at the opening of sales at Mzuzu Floors yesterday.
During the official opening of the market presided over by Minister of Agriculture and Food Security Francis Kasaila, the rejection rate stood at 50 percent compared to 39.2 percent last year.
On the other hand, the highest price the buyers offered was $1.30 (about K962) per kilogramme (kg) for bottom leaf of least grade compared to $1.70 (K1258) per kg the same quality fetched last year at the Mzuzu market. For the auction market, the buyers yesterday offered $0.90 per kg as the lowest price.
O n t h e c o n t r a c t platform, the buyers offered $2.30 (K1702) per kg as their highest price for first grade cutters compared to $2.20(K1628) last year.
Speaking in an interview, Kasaila lamented the high rej ect ion rates standing above the acceptable threshhold of 20 percent, saying: “I am not impressed with both the prices and the high rejection rates at the auction market. We are expecting the pricing to be better for our farmers.”
The minister attributed the lower prices and higher rejection rates to use of recycled seeds, mixing of different grades of tobacco and high leaf moisture content.
He has since challenged the farmers to use hybrid seeds every season, among other measures, to deal with the challenges.
Kasaila also hinted that this year’s Tobacco Marketing Season could be the shortest due to the novel coronavirus pandemic.
In his remarks, Tobacco Commission (TC) chief executive officer Kayisi Sadala said although faced with some teething challenges, the secret bidding system has created competition on the market.
He said he is hopeful that prices will pick up and that rejection rate will drop as the market progresses and more buyers come in.
Sadala said currently rejection rate, especially at auction marketing, is averaging between 35 and 40 percent as some buyers are yet to participate fully.
W h i l e a s k i n g government to intervene on the rejection rate, Tama Farmers Trust president Abel Kalima Banda appealed for patience from fellow growers who were not present at the floors as has normally been the case. Covid-19 restrictions have seen farmers not attending the sales.
On the opening day on April 20, Lilongwe Floors had $1.30 per kg as maximum offer on the auction trading and $2.40 per kg was the highest on the contract market while Chinkhoma in Kasungu and Limbe Floors in Blantyre also had a maximum price of $1.30 per kg on the auction and $2.50 per kg on the contract market. on April 20, Lilongwe Floors
Since the market was opened on April 20, the country has sold 6.1 million kg of tobacco that has fetched $9.6 million at an average price of $1.56 per kg.
This is in comparison to 5.9 million kg sold during the same period last year at $7.5 million and an average price of $1.28 per kg.
This year, tobacco production is estimated at 155 million kg against buyer demand of 161 million kg.