TC excited with tobacco prices

Tobacco Commission (TC) chief executive officer Joseph Chidanti Malunga says this year’s tobacco prices are better despite the drop in the leaf’s output due to dry spell in the last growing season.

Speaking during a media interaction in Blantyre on Friday, he said prices of the leaf have improved this year.

“We are excited with the price of high grade tobacco, which has picked up from an average of $1.06 (K874) per kilogramme [kg] to $2 (K1 650) per kilogramme and the price of low grade tobacco has also picked up from an average of 96 cents (K792) to $1.76 (K1 452) per kilogramme,” said Malunga.

He said since the opening of Lilongwe Floors on March 31, about 13 million kg of tobacco has been sold, raising $26 million (about K21 billion).

Said Chidanti Malunga: “We believe that we will sell up to 100 million kilogrammes of tobacco even though the buyers wanted I61 million kilogrammes of tobacco. So far, there is also no rejection of tobacco on the market.”

He encouraged growers to grade their tobacco properly to fetch good prices on the market.

Chidanti-Malunga said if farmers do not adhere to this, chances are high that buyers could neglect Malawi and buy tobacco from neighbouring countries such as Zambia and Tanzania.

He said TC will start registering growers for the next season from June this year, adding they expect to register about 50 000 growers.

Meanwhile, available data shows flue cured tobacco is fetching a high of $2.85 (about K2 337) per kilogramme (kg) while burley is fetching $2.30 (about K1 886) per kg on the contract market.

On the auction market, the highest price offered for burley is at $1.75 (about K1 435) per kg while the minimum price was $0.95 (about K779) per kg on both markets.

Last year, the highest price on the auction floors was $1.56 while the lowest was $0.90. On the contract side, the highest price was $2.40 per kg.

Currently, the Malawi tobacco market has nine buyers which include Limbe Leaf, Alliance One, Premium Tobacco, Japan Tobacco International, Malawi Leaf, Associated Central African Limited, African Tobacco Services, Watergen and Voedsel. Tobacco still remains Malawi’s main export crop, contributing about 60 percent to the country’s foreign exchange earnings and 13 percent to the gross domestic product.