Tobacco industry loses K74bn annually—TC
The Tobacco Commission (TC) says the tobacco industry has, on average, been losing $100 million (about K74 billion) annually in recent years due to low productivity and poor prices offered by buyers.
TC acting chief executive officer Alexander Bulirani told the 2020 Tobacco Industry Conference in Lilongwe on Friday that the crop is facing a myriad of challenges, including the anti-smoking lobby, poor prices and weather-related challenges affecting output.
In trying to increase competition among buyers and improve prices, the TC board chairperson Harry Mkandawire said they plan to also engage old buyers who left the industry.
He mentioned the British American Tobacco (BAT), which stopped buying the country’s tobacco, saying TC will lobby them to come back because the political environment has changed.
He said: “It’s true that we are losing that much, but again we are mindful about the anti-smoking lobby taking place out there. We need to address issues such as child labour, among others.”
On his part, Minister of Agriculture Lobin Lowe said there is too much politics in the tobacco industry which he said is influencing poor prices offered by buyers.
He said the same buyers are offering better prices in neighbouring countries.
Said Lowe: “Currently farmers are toiling for nothing. In the past, farmers used to buy brand new vehicles, but now they cannot afford which is sad.
“We need to do a soul searching on what went wrong and find solutions.”
He said the ministry will speed up the crafting and gazetting of the Tobacco Industry Act regulations to do away with some challenges brought about by the Act.
On his part, Alliance One Tobacco managing director Hugh Saunders said it was high time the industry discussed better return for farmers not only through pricing but best practices.
He admitted that as buyers, they are also receiving international pressure to only buy regulatory-compliant tobacco.
JTI Leaf Malawi Limited managing director Fries Vanneste wondered how the TC was working on traceability issues for non- contracted growers, saying internationally, traceability remains a serious issue for tobacco marketing as companies demand to know the environment in which the leaf was produced.
Last season, tobacco consolidated trade demand dropped to 132 million kilogrammes (kg) from 161 million kg owing to bad weather.
This season, the commission has issued 46 684 licences with 163.3 million kg, which is a drop from 53 170 licences and 173 million kg produced last season.
Regionally, weather effects also negatively affected the crop’s production with Zimbabwe registering 30 percent, Tanzania 38 percent, Mozambique 25 percent decline in tobacco production.
