Malawi has to invest in production of high quality tobacco if the country is to remain competitive with other world producers of the crop, JTI Leaf Malawi managing director, Fries Vanneste has said.
Next year demand for Malawi tobacco has slightly dropped with Tobacco Control Commission (TCC) saying international buyers are interested to buy about 177 million kilogrammes (kg) of the leaf, eight percent less than 192.6 million kg sold this year.
But JTI, the third largest tobacco company in the world after Phillip Morris and British American Tobacco (BAT), has committed to continue buying 25 million kg of Malawi tobacco each year.
Speaking when he briefed journalists on JTI Leaf Malawi factory tour in Lilongwe on Friday, Vennesta says to sustain the quality of tobacco used in the eight cigarette brands that the company is producing for the international market, JTI needs high quality leaf.
He was concerned that of late Malawi’s leaf quality has been of low standard.
“They only way I can control the quality of tobacco that we use for our products is to have direct contact with the grower. That is why we have an Integrated Production System (IPS) to ensure that we are producing quality tobacco.
He said despite the anti-smoking campaigns and related legal frameworks the tobacco industry in Malawi has a promising future, if quality is sustained.
“JTI is here to stay but quality is everything for us. There are neighbours [Mozambique, Zimbabwe, Tanzania and Zambia] who are producing high quality leaf. In Malawi we should also be concerned with how can we deliver quality tobacco,” he urged.
JTI Leaf Malawi sentiments comes at a time when the industry is seeking ways to improve prices the leaf fetches on both auction system and
Of late, some farmers have been expressing concerns that contract tobacco buyers offer low prices and in some cases reject some of the tobacco.
But Vanneste pledged that so long tobacco quality is sustained, his company will continue to offer the highest price for the leaf.
JTI is one of Malawi’s largest tobacco buyers with investment of over $435 million in the tobacco business over the past five years.
The third largest leaf buyer in the country, JTI Leaf Malawi last year
offered an average of $1.82 per kg for the best leaf compared to national average of $1.62.
Vanneste watered down concerns that IPS exploits the grower saying so far, the system has improved quality and increased yields.
“IPS benefits the grower as they do not have all the money to buy farm inputs. However, with IPS they get farm inputs and technical assistance,” Vanneste explained.
JTI, which buys burley tobacco, has over 8 500 growers on IPS in the country.
Earlier this year, Farmers Union of Malawi (FUM) faulted the system of lacking transparency especially when it comes to loan packages.
However, Minister of Agriculture, Irrigation and Water Development Allan Chiyembekeza has backed the system saying, it has improved the tobacco industry.
Tobacco is Malawi’s main cash crop, contributing about 60 percent to the country’s foreign exchange earnings.
This year tobacco sold on the auction system raked in $337 million (about K200 billion) in foreign earnings.