Average tobacco prices still low—AHL Group
Four weeks into the tobacco marketing season, average prices of the leaf have not improved despite farmers crying foul and government promising to rectify the situation.
Figures from AHL Group show that the average price for tobacco sold under auction is 88.10 cents (K624) per kilogramme (kg) while the leaf sold under auction or Integrated Production System (IPS) is $130.20 (K923) per kg.
The figures show that prices are better on IPS compared to the traditional auction system.
AHL Group corporate affairs manager Mark Ndipita said on Thursday the prices have been constant over the past days.
“For the past few days, Kanengo Floors has been quiet without any disturbances unlike the previous weeks because farmers just want their tobacco to be sold.
“Remember, these people obtained loans and have huge family obligations so I think what is important to them is money,” he said.
A farmer based at Mponela in Dowa, Kailosi Nasoni, in an interview, said he does not care whether he gets poor prices because at the end of the day, the buyers will still be the winners.
“I have already made huge losses because I took loans and I will be surprised if some creditors will not possess my goods for failure to repay loans,” he said.
Tobacco Association of Malawi (Tama) president Reuben Maigwa said it is sad that buyers are offering poor prices, adding that growers have no option but to sell the crop because they cannot eat the leaf.
“We grow tobacco so that when we take it to the floors it is bought not rejected. So, at the end of the day even when prices are poor we will still be forced to sell,” he said.
At the end of week four, 13.37 million kg has been sold at an average price of $1.23 (K873) per kg, earning the country $16.4 million (about K12 billion), according to TCC figures.
During the same period last year, about 21.6 million kg of tobacco was sold at an average price of $1.46 (K1 036) per kg bringing in $31.8 million (K23 billion) in forex earnings.
