While the start of the tobacco selling season at Lilongwe Auction Floors raised hopes of a radiant season, it was not the same at Limbe Auction Floors as the quality of the leaf was poor.
Minister of Agriculture, Irrigation and Food Security Allan Chiyembekeza, who presided over the opening, could not hide his disappointment, saying: “We have started off very well in terms of pricing, but the quality of the tobacco being offered today is not good. I must be honest that I am disappointed with the way the market has started, but I hope we will do better as we go.”
For a moment, farmers murmured but they calmed down as the sale proceeded with the highest bale fetching $1.80(about K809) per kilogramme(kg) while the lowest fetched $ 1.00(about K450) per kg.
The minister promised to address the issue of quality, saying: “We cannot proceed like this. We need to find out the problem and put in place proper measures starting now.”
While Tobacco Control Commission (TCC) chief executive officer(CEO) Bruce Munthali concurred with Chiyembekeza’s sentiments, he expressed optimism considering that the sales were just kicking-off, saying: “The crop presented today is prime leaf but we hope that quality will improve as sales progress.”
Patrick Mkomadzinja, a farmer from Migowi in Phalombe, admitted that they had a bad season, but went on to decry the economic ramifications of such a start to small-scale farmers like him.
“We could have had a better crop this year, but the floods affected us. At the current prices being offered, we will be stuck in debt because we had to re-stock inputs such as fertiliser after the floods,” said Mkomadzinja.
According to Munthali, a total of 5 000 bales were auctioned at Limbe floors, raising Malawi’s current earnings from tobacco sales to $2.5 million(about K1.1 billion) compared to $1.3 million(about K580 million) over the same period last year.
Random sampling of prices showed an average price hovering around $ 1.26(about K566) while overall average at national level is $1.42(about K638) compared to $1.11(about K499) last year.
Rejection rate for auction-sold tobacco stood at seven percent while contract tobacco had no rejection yet.
Munthali said Malawi is expecting about 181 million kg of tobacco in 2015 out of which the Southern Region is expected to contribute about 17 million kg; a significant decrease (due to the floods) from over 20 million kg produced last year.
Present were regular buyers such as JTI and Alliance One while the new buyers Africa Tobacco Sales, Sino-Ma Tobacco International and Al-Farid are yet to join in.
The tobacco selling trend has been that sales start on a high note, but face challenges in sustaining the stability as sales progress.
Mzuzu Auction Floors is scheduled to open on April 17.