Tobacco buyers cautious on buying auction leaf

The Tobacco Processors Association (TPA) says due  to international regulations on traceability of tobacco, buyers are cautious on buying the leaf from non-contracted growers.

In an interview, TPA chairperson Hugh Saunders said it is now  difficult to sell Malawi’s tobacco that is not compliant with the regulations.

“The industry is becoming more sensitive to issues of compliance, so industry stakeholders need to ensure farmers who are not compliant today become compliant as quickly as possible so that the tobacco can be accepted in America and other countries that are child-labour sensitive,” he said.

Saunders said with guidance from the Tobacco Commission, Agricultural Research and Extension Trust and all tobacco industry players, there is need to resolve the issues.

Last week, it was revealed that some buyers were still having stocks bought last year because Withhold Release Order (WRO) is limiting the exports.

In November 2019, the United States (US) Government imposed the WRO on Malawi, which restricts tobacco from being exported to the US due to child and forced labour concerns.

Tama Farmers Trust president Abel Kalima Banda said it was too early to gauge the impact of rejection rate, which peaked at as high as 95 percent last year, because the market was still in its infancy stage.

However, National Association of Smallholder Farmers in Malawi chief executive officer Betty Chinyamunyamu said the high rejection rate will lead to serious losses on the part of growers and affect investment for the next season.

She said last year, the rejection rate contributed to the 75 percent reduction of auction production in the Southern Region where majority of growers prefer auction than contract selling of tobacco.

Buyers have in recent years preferred the contract system of selling tobacco to enable them deal with traceability and quality issues because they offer extension services to contracted growers.

Minister of Agriculture Lobin Lowe said his ministry is working with the Ministry of Labour to present relevant laws in Parliament to strengthen efforts to curb child and forced labour in the tobacco industry and other sectors.

On Tuesday last week when he officially opened the marketing season in Lilongwe, President Lazarus Chakwera advised tobacco industry players to acknowledge that the industry is dying and alternative crops should be explored to wean the country from tobacco.

Tobacco remains the country’s key cash crop, contributing about 60 percent to foreign exchange earnings and 15 percent to the economy.