Commission in hunt for new tobacco buyers
Tobacco Commission (TC) has disclosed that it is engaged in talks with potential tobacco buyers from five countries as one way of strengthening competition among the country’s group of buyers for the green gold.
The development comes at a time earnings from the crop remain far from impressive, despite the country producing less of tobacco.
In an interview with Business News during the week, TC chief executive officer Joseph Chidanti-Malunga said the commission wants to revive the crop by bringing in more buyers.
He said companies from countries such as Indonesia, Malaysia, Ethiopia, Brazil and Ukraine have reached out to the commission, expressing interest to enter into a buying agreement with it.
“They have reached out to us with inquiries on how they can go about the process of buying tobacco. Currently, we are looking into some policy issues within the government machinery to make this work and smooth agreement,” said Chidanti-Malunga.
He said the commission is striving to reposition and re-decorate the Malawi tobacco industry to ensure that its production volume increases as a way of sustaining the tobacco industry.
“We want to up our production to at least 180 million kilogrammes in a year, but in case our traditional buyers will not increase the volume they want to get from Malawi, this is why we are looking into this grouping of buyers to ensure that we get closer to our target and bring the desired income in the country,” he said.
Tama Farmers Trust president Abel Kalima Banda, in an interview, said it is important that the tobacco regulator moves to ensure that there are more buyers to enhance competition.
He said: “We hope with more buyers in the industry, prices will be better and this will come along with improved production, which would mean more earnings for the farmers and the economy as well.”
Currently, Malawi tobacco buyers include Limbe Leaf, Alliance One, Premium Tobacco, Japan Tobacco International, Malawi Leaf, Associated Central African Limited, African Tobacco Services, Watergen and Voedsel.
Tobacco remains Malawi’s key cash-crop, contributing about 60 percent to foreign exchange earnings, 15 percent to the economy, and the sector—directly and indirectly—employs millions of people.
In this year’s tobacco marketing season, Malawi earned $197.1 million (about K160 billion), which is 13 percent higher than what it generated from the crop last year.
The country last year earned $174.97 (about K143 billion) from tobacco which continues to be its main export commodity despite facing plummeting demand from the international market.
