Tobacco Control Commission (TCC) has said the minimum price structure of buying flue-cured tobacco saved the situation during the just-ended tobacco marketing season.
TCC technical and operations manager Fred Kamvazina said in an interview this week that as prices of the flue-cured tobacco were not good from inception, buyers were supposed to adhere to the minimum prices.
He said flue-cured tobacco growers suffered a heavy blow during this year’s marketing season as evidenced by the rejection rate, which went up to 92 percent while burley, the preserves of small-scale farmers, had 65 percent rejection rate as the highest.
Kamvazina attributed the poor prices to weakening global demand of flue-cured tobacco.
On burley, he said sales started on a good note but prices diminished towards the end of the season because growers oversupplied the market against what was required by the buyers.
“In the first few weeks of the sales, buyers could go between five and 25 cents above the minimum price in other styles, but when it was realised that that there was an oversupply, prices started diminishing,” he said.
Kamvazina said TCC is in the process of consolidating the demand required for next year as per to allocate quotas in line with the global demand.
This year, Malawi earned $337.3 million [K189 billion at the current exchange rate] from tobacco, which is eight percent down from last year’s $366.3 million [K205 billion].n