Tobacco prices pick up

Tobacco farmers can now afford a smile as the prices on the tobacco market continue to pick up after one week into the 2017 marketing season.

Figures from AHL Group, formerly Auction Holdings Limited, for the week ending 13 April, indicate the country has sold 1.35 million kilogrammes (kg) of tobacco at an average price of $1.35 (K985) raking in $1.8 million (about K1.3 billion).

The amount is higher compared to 1.20 million kg sold at an average price of $1.01 (K727) raising $1.21 million (K883.3 million) the same period last year.

Commenting on the trends, AHL corporate affairs manager Mark Ndipita on Tuesday said the market has performed much better than the opening week for the tobacco season last year.

 “For instance, no-sale rejection for first week this year is 6 percent while first week of 2016 it was 62 percent.

“Again, the average price for burley for week one this year is $1.35 per kilogramme while week one of 2016 the average price was $1.01 per kilogramme,” he said.

On his part, Tobacco Control Commission (TCC) acting chief executive officer David Luka said the market is thriving and hopes the trends continue and probably gets better.

Luka added that on average most buyers are buying above the minimum price set by government.

Low quality tobacco, branded as ‘no grade” which usually sells at 80 cents (K584)— the minimum price—is fetching prices as high as $1.20 (K876) on the market.

As of Tuesday April 18, tobacco on contract had fetched a highest price of $2.40 while that on auction had fetched the highest price of $2.

Currently, only two markets have opened at Kanengo in Lilongwe and Chinkhoma in Kasungu.

The Limbe Tobacco Floors are expected to open tomorrow while the Mzuzu tobacco market will open on May 3 2017.

President Peter Mutharika opened the Kanengo Auction Floors in April with an appeal to buyers to offer better prices for the crop which is currently the country’s main forex earner accounting for over 60 percent.

Mutharika said government will continue with the current policy reforms in the tobacco industry which include the Integrated Production System (IPS), review of the Tobacco Act, the new tobacco grower registration system and investments in value addition to create a win-win situation between growers and buyers.

Currently, buyers export most of the crop for cigarette manufacturing and blending.

The country begun exporting tobacco in 1893 and as of 2005, Malawi was the 12th largest producer of tobacco. n