Tobacco rejection rate at 18%, TCC comfortable

The Tobacco Control Commission (TCC) has said it is contented with the leaf’s 18 percent national rejection rate at the three auction floors thus far opened, arguing it is minimal, sustainable and within acceptable limits.

The tobacco industry regulator has since expressed optimism of a stable market going forward, saying there is great likelihood that the sales will be conducted smoothly unlike last year when there were stoppages in some auction floors.

“We have seen in week three of trading that rejection rate has settled at 18 percent which is normal and within acceptable limits since every rate below 25 percent is good for the smooth conduct of the market,” said TCC chief executive officer (CEO) Bruce Munthali, in an interview yesterday.

Munthali was asked to provide an update on the performance of tobacco market which opened March 24 2014 with Lilongwe Auction Floors being the first.

He said during the early days of sales, the market is normally dominated by no grade tobacco which is characterised by wet tobacco and mixed grade which he said fuels the high rejection rates.

Munthali has appealed to growers to exercise calmness during the rest of the marketing season and desist from disrupting sales when they encounter minor market challenges such as perceived low prices.

In the three weeks of trading, figures show that the leaf’s sales has realised $20.8 million, representing 71 percent above what was earned during the same period last year.

Thus far, according to the data, about 16 million kilogrammes (kg) have been sold which represents an 82 percent  jump above what was sold during the same period in 2013.

But some tobacco growers at the Lilongwe Auction Floors on Monday expressed dissatisfaction with the prices which they argued are still sticking to minimum set prices.

“This is an election year and as such I thought government and all other parties would help us push for better prices so that we have a win-win situation this year. Something must be done otherwise these low prices are frustrating,” said Jobani Kampango, a burley tobacco grower from Madisi in Dowa.

Last week, Tobacco Association of Malawi (Tama) CEO Graham Kunimba expressed displeasure with the prices being offered and the continued no sales on most tobacco bales.