Tobacco earnings up 13% in 2021
Malawi has cumulatively earned $197.1 million (about K160 billion) from tobacco sales in 2021, which is 13 percent higher than what the country generated last year.
The country last year earned $174.97 (about K143 billion) from tobacco which continues to be the country’s main export commodity despite facing plummeting demand from the international market.
According to a summary of the 2021 market provided by AHL Group, tobacco sales in the just-ended 2021 marketing season took 21 weeks compared to 19 weeks in 2020.
Unlike last year when the country sold 114 million kilogrammes (kgs), this year, according to AHL, the country has sold a total of 123.7 million kgs of all tobacco types.
In terms of average pricing, the AHL commentary said the seasonal average price of all tobacco types was high at $1.59 (about K1 295) per kg at the end of the marketing season this year, compared to $1.53 (about K1 247) per kg recorded during the same period last year.
Reads in the part the AHL report: “Increased volume of traded tobacco and better average prices in the 2021 tobacco marketing season had a positive impact on the earnings compared to the revenue realised in 2020.
“The seasonal cumulative no-sale rejection on the auction burley market was lower at 11 percent this year, compared to 66 percent registered at the end of the season last year.”
However, our analysis shows that the $174 million which the country has earned at auction floors level this year is way below the $250 million which the country is consuming every month or monthly import cover, based on Reserve Bank of Malawi (RBM) statistics.
In a telephone interview yesterday, Tobacco Commission (TC) chief executive officer Joseph Chidanti Malunga described the 2021 tobacco marketing season as “very successful”, saying all the key market variables registered an increase.
He said: “Both average price, volume and revenue have gone up. The commission has been very serious in managing the crop size and the good news beyond those good numbers is that we predicted exactly as it has turned out in terms of crop size.
“We had projected a crop size of 122 million kgs and we have ended up with 123 million kgs and this is the first time we have been accurate in the history of the commission.”
In a separate interview, Tama Farmers Trust chief executive officer Nickson Lita said the 2021 market was generally better than 2020 market.
He said this year there was also a slight improvement in terms of prices and tonnage sold on the market.
However, Lita said farmers complained of a high rejection rate on auction tobacco and cited failure by some buying companies to fulfil contractual terms as main disappointments for the season.
“As Tama, we will be working with partners in the industry to look at these grower complaints,” he said.
