Minister of Agriculture and Food Security Professor Peter Mwanza has attributed the drop in aggregate tobacco revenue this year to underproduction of the leaf.
Mwanza in an interview on Friday said poor prices in previous years discouraged farmers from growing more tobacco.
The minister, however, expressed optimism that tobacco market is bound to be buoyant next year because of the adoption of the integrated tobacco system (IPS).
This is the first time Mwanza has commented on the performance of the 2012 tobacco season since the market closed on August 14.
“The tobacco season is gone. The revenue this year has been low due to underproduction largely because of poor prices in previous tobacco seasons,†he said.
This year, Malawi produced 79.45 million kilogrammes of tobacco which is 66 percent lower compared to last year’s 236.79 million kilogrammes.
That aside, this year’s tobacco sales dropped by 40 percent from $293.7 million in 2011 to $176.87 million, according to the Tobacco Control Commission (TCC).
Market analysts feared the drop would worsen the foreign exchange shortage which is key to importation of critical goods such as pharmaceuticals, fertiliser and fuel. Tobacco wires in about 60 percent of the country’s foreign exchange earnings.
In the 2010 season, tobacco fetched a record high of $410.60 million.
“Farmers are clever people. They grow little tobacco if they see that the crop is [not fetching much]. But I can assure you that we have registered a large number of growers this year,†said Mwanza.
Commenting on the IPS, Mwanza said the system is expected to improve tobacco production and marketing by introducing and enforcing accountability, compliance, traceability and profitability for farmers.
He said for the system to bear fruits, there is need for the industry to improve technology adoption, especially among farmers.
The minister said under the IPS system, farmers will to access bank loans through the sponsored crops which in a way integrate them to trade requirements.
