Malawi has earned more revenue from tobacco in the first three months of the marketing season compared to same period in the previous year, tobacco figures show.
Figures provided by AHL Group indicate that after eight weeks of sales, 74.6 million kilogrammes (kg) of all types of tobacco have been sold at an average price of $1.64 per kg (about K1197.20) realising $122.6 million (about K890 billion).
While during the same period last year 45.9 million kgs were sold at an average of $1.84 (about K1 342) with proceeds amounting to $86 million (about K62.7 billion).
According to an AHL market commentary, the improvement of the quality presented on the market in week 8 of sales represents 50 percent of the projected volume of 147 million kgs for the 2018 tobacco marketing season.
Tobacco Control Commission (TCC) chief executive officer Kaisi Sadala said in an interview on Tuesday, the country is expected to earn more revenue from tobacco this year on the back of good prices on offer as well as the supply over demand issue.
“It is pleasing that this year’s revenue over last years’ is almost double. This is mainly due to the good prices that are on offer. The farmers are attracted with prices. Ideally, when prices are bad, farmers hoard their tobacco in anticipation for better prices but this year, farmers are opening up to sell their tobacco, a development that has seen a rise in revenue,” he explained.
He said the commission is positive that the trend will continue and ultimately lead to more revenue from the cash crop this year.
Tobacco Association of Malawi (Tama) chief executive officer Mathews Zulu has since expressed excitement over the good performance of the crop on the market this year.
He said: “It is every grower’s wish and expectation not only to sell their products but to sell at a responsible price and this is the case his year. This year, the market is registering low rejection rates and prices are also good. Supply against demand is low and our expectations are to continue having better prices which will fetch more for farmers.”
Zulu said Tama, which is a tobacco grower representative body, is encouraging farmers not to relax but ensure that they continue to sell high and good quality leaf so as to ensure that they continue to fetch good prices and more revenue.
The tobacco sector remains critical to Malawi’s economy as it is still among the major forex earner and contributes significantly to the country’s GDP and tax base.
This year the cumulative average price of all types of tobacco has further increased from by 5 percent from $1.61 per kg in week 7 of sales to $1.81 per kg in week 8.
Last year, Malawi produced 106 million kgs while this year, production is expected to grow to 147 million against a demand of 195 million kgs.