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Malawi earns $362m tobacco forex

Malawi has earned $361.7 million, (about K127 billion) from tobacco crop this year, a figure which represents a 103 percent increase over last year’s earnings, final figures compiled by the Tobacco Control Commission (TCC) have showed.

Tobacco revenue this year  has been a milestone
Tobacco revenue this year has been a milestone

Such earnings at auction floors are way above the $178 million earned last year when Malawi witnessed one of the worst tobacco seasons characterised by recurring market suspensions and poor leaf prices, among others.

As such, the reported increase in tobacco earnings this year, could aid the economy’s ability to sit on adequate foreign currency as it drifts into the lean season and help smooth importation of key imports such as fertiliser.

The country consumes $188.1 million worth of foreign exchange, which means that this year’s tobacco earnings could sustain the country’s import cover for at least two months should the Reserve Bank of Malawi (RBM), commercial banks and importers manage the foreign currency well.

The figures show that burley tobacco alone has earned the economy $205.2 million as compared to $59.6 million earned last year, representing a 244 percent jump.

TCC statistics show that this year, Malawi has sold 168.6 million kilogrammes of tobacco as compared to 80 million kilogrammes sold last year, which represents a 111 percent increase.

On average price, however, the figures show that the final average prices has marginally declined to $2.15 this year from an average price of $2.22 recorded last year, representing a 4 percent decrease.

TCC chief executive officer Bruce Munthali told Business News last week that tobacco still remains the ‘main driver’ of Malawi’s economy because of its contribution to the country’s wealth.

“This is a crop which continues to contribute about 60 percent of Malawi’s total export earnings, and where government derives 25 percent of total tax base, directly employing 12 percent of Malawi population and also contributing 13 percent of Malawi gross domestic product (GDP).”

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