Tobacco industry players have expressed optimism that there will be increased volumes and quality leaf at the tobacco market despite a slow start.
In an interview ahead of the opening of Chinkhoma in Kasungu and Mzuzu auction floors tomorrow and on May 9 2022, the indnstry players said they hoped to see improved tonnage and prices.
In an interview on Monday, Tobacco Commission spokesperson Telephorus Chigwenembe said in the four weeks of opening the marketing season, low volumes were expected as many growers were still preparing their leaf since the tobacco market started earlier than in previous years.
He said: “On prices, we are happy that buyers are complying with set minimum prices. We are aware that the best quality tobacco is yet to be brought to the floors.
“In the first few weeks of trading, it is mostly the lower leaf, which is of low quality, that is brought to the floors. We hope to hear a different story when the best quality [the middle to top leaf] is brought to the floors.”
AHL Group figures show that due to the reduced volumes and earnings, during the third week of tobacco sales in April 2022, about 600 000 kilogrammes (kg) were sold at $0.96 million (about K544 million) at an average price of $1.49 (about K1 330) per kg.
During the same period last year, the country had sold 14.96 million kg at $24.80 million (about K20.5 billion) at an average price of $1.66 (about K1 370) per kg.
Speaking separately, Tobacco Association of Malawi (Tama) chief executive officer Nixon Lita said the market has been slow as tonnage sold so far is an equivalent of three to four days of normal sales, making it difficult to make a proper assessment of the market.
He, however said it was encouraging to see good competition at the auction market, with buyers observing government set minimum prices.
Farmers Union of Malawi chief executive officer Jacob Nyirongo said the opening of the remaining markets aligns with the tobacco production calendar, observing that the earlier opening of the other tobacco markets like Lilongwe Autcion Floors was an attempt by government to improve on forex inflows.
He said: “Tobacco production cycle has fixed timelines for certain processes which cannot be hastened, otherwise quality of the leaf will be compromised.”
Projected production volumes, according to the first round of crop estimates survey, is 103 million kg of tobacco against buyer volume demand of 140 million kg.