Tobacco sales at the Limbe Auction Floors were suspended yesterday for close to two hours following farmers’ protests against low prices and high rejection rates.
The market closed around 9.45 am, 40 minutes after its official opening, following an outcry from farmers, who demanded that Minister of Agriculture, Irrigation and Water Development Joseph Mwanamvekha intervenes, saying at the current prices and no sale for most tobacco, they stand to lose out on returns.
Representing farmers grievances at the floors, Zomba-based Kenston Powder said the situation did not guarantee farmers returns.
He said: “At the current prices, we feel we are not being rewarded for our efforts. What we are getting are prices that we used to get in the 1990s, but now the currency has lost value over time. Again, a lot of bales are being rejected and we are very surprised. If they are not prepared, let them go back to the drawing board and call us back when they are ready.”
Another farmer Belita Paulo, chairperson of Osauka Women Growers Club in Mayaka, Zomba, said with the current prices, their dreams of getting out of poverty through tobacco farming are far-fetched.
After deliberations, it was agreed that the suspension be lifted with promises that the rejected bales be taken back to the floors on Monday.
Paulo said government officials told them that the poor prices were due to a reduced number of buyers.
There were four buyers yesterday, JTI, Limbe Leaf, Alliance One and Malawi Leaf. Associates Central Africa Limited and Associated Tobacco Services were yet to start buying.
On the first day of the sales, auction tobacco fetched a minimum of $0.90 per kilogramme (kg) (about K659) and a maximum of $1.40 (about K1 026) while contract tobacco sold at a minimum of $0.90 and a maximum of $2.30 (about K1 685) per kg. A total of 4 271 bales were brought to the auction floors yesterday.
Addressing journalists after touring the floors, Mwanamvekha said government expects prices to improve as the market stabilises.
“We want to see that farmers get good prices. That is why we intervened and discussed with buyers. We hope that this year’s prices will be better because on average, we expect improved quality on account of good rains we experienced this year unlike last year when we had drought,” he said.
Tobacco Control Commission figures indicate that since the opening of the tobacco market last week, the country has generated $3.4 million (about K2.5 billion) from the sale of 4.3 million kg of tobacco. As compared to the same period last year, the country sold 2.9 million kg and earned $2.3 million (about K1.7 billion).
National average prices so far stand at $1.28 per kg (about K938) as compared to $1.24 (about K908) per kg last year.
Final crop assessment conducted from February 24 to March 8 established that this year’s tobacco output is at 205.46 million kg against a buyers’ demand of 166.8 million kg.
In recent years, the country’s tobacco industry has faced numerous challenges, including fluctuating prices offered to growers, hostile weather conditions, oversupply on the market, increased cases of non-tobacco related material (NTRM) nesting, unfavourable regulatory environment and FCTC guidelines.
But the recent passing of the Tobacco Industry Act of 2019, enacted in February this year, offers hope to industry players who are optimistic that the law will protect the tobacco grower and bring sanity in the production and marketing of the crop touted to generate up to 60 percent of foreign exchange earnings.
Tobacco contributes about 13 percent to the country’s gross domestic product (GDP).