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Tobacco rakes in K25 billion

 

Cumulative earnings from tobacco, Malawi’s major foreign currency earner, have improved to $100.2 million (about K25 billion) as of June 14 2012.

This is 150 percent higher than earns during the same period last year.

 

The development is sweet news for Malawi, which in recent years, has suffered a severe foreign currency shortage in the formal financial market that in turn adversely affected smooth importation of critical goods and services as importers grappled to access foreign cash.

 

Dollars from tobacco, which rakes in 60 percent of total foreign exchange earnings, are currently being channelled to commercial banks since May 7 2012, making foreign cash readily available to the private sector.

 

Said Tobacco Control Commission (TCC) chief executive officer Dr. Bruce Munthali on Friday: “As you can see from these latest statistics, the market is being characterised by a lot of stability as there is a pick-up in both prices and proceeds from the sales of tobacco.”

 

Munthali said this on the sidelines of an inspection tour at the Lilongwe Auction Floors by TCC board of directors.

 

He said the weighted average price for all types of tobacco during the period has also significantly improved to $2.07 per kilogramme which is higher compared to 95 cents recorded last year, representing a 118 percent increase.

 

During the period, Munthali also said the market has sold 48.2 million kilogrammes of the leaf as compared to 41.9 million last year.

 

He said burley tobacco, grown by a majority of smallholder farmers, has raked in $80.3 million (about K20.1 billion) out of 38 million kilogrammes.

 

Munthali reiterated that the good tobacco prices this year have been a result of increased competition among merchants following reduced crop size as compared to last year.

 

Tobacco output this year is estimated to have dropped by almost 35 percent to 151 million kilogrammes from 232 million last year.

 

The drop has been explained by the introduction of quotas to match the crop size to the international trade requirement as well as due to dry spells that hit some parts of tobacco growing areas in the country.

 

In separate interviews at the auction floors, most tobacco growers expressed satisfaction over improved weighed average prices which they argue are far much better than what they got last year.

 

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