Tobacco market stabilises, says TCC
Tobacco sales in the three auction floors opened so far have stabilised, with rejection rate at less than 18 percent and five percent for auction and contract sales respectively, the Tobacco Control Commission (TCC) has said.
TCC chief executive officer Bruce Munthali told Business News on Friday, after an impromptu visit of Limbe Auction Floors, that the rejection rate for auction, in which 20 percent of the leaf is being sold, is within the acceptable rejection limit.
“We have noted that in all the three markets of Lilongwe, Limbe and Chinkhoma [in Kasungu], the sales are going on smoothly and the prices have stabilised. We are hoping that the situation will continue as it is,” he said.
Munthali said at Limbe, where 1 500 contract bales and 2 000 bales on auction were sold on Friday, with the highest price was recorded at $2.15 (K857) per kilogramme.
He said during the week, there has been tremendous improvement in the quality brought to all the three auction floors.
On Wednesday, growers disrupted the market at Limbe, but Munthali said the growers’ concerns were sorted out and they understood the price structure.
Some industry sources have said generally, the first days of the market is filled with vendors or otherwise known as intermediaries who hope to cash in on good prices despite their leaf not being properly graded.
Most of the growers were also hoping for favourable prices and high expectation, particularly because this is an election year.
Mzuzu Auction Floors is expected to open on April 23, according to TCC.
The government set minimum prices for both contract and auction have this year been set at $1.76 per kg from last year’s $1.69 per kg for burley, $2.65 per kg from $2.63 per kg for flue cured and $2.10 per kg from $1.80 per kg for dark fired tobacco.
The tobacco regulator body has said since the sales season opened on March 24, they have noted a number of emerging challenges relating to classification, no-sale bales for the auction tobacco, nesting, non-tobacco related materials, misallocation of contract and auction tobacco and limited participation by some tobacco buying companies.
