Tobacco rejection rate under auction system rose by four percentage points to 42 percent in week 11 of sales, published AHL figures have shown.
During the previous week, the rejection rate stood at 38 percent.
In an interview with Business News on Wednesday, Tama Farmers Trust president Abel Kalima Banda said the rejection rate was weighing badly on the growers’ investment.
He said: “It is disheartening to see that despite the good leaf being brought to the floors this year, the rejection rate is rising. This is getting farmers frustrated as they are not selling their leaf,” he said.
Banda, however, said he was satisfied with the prices offered on the market this year.
“Looking at the prices offered on the market, particularly on contract farming, farmers might realise better returns from the crop this year,” he said.
AHL Group figures show that since the opening of the tobacco market in April this year, Malawi has generated $86.9 million (about K70.73 billion) from sales.
The revenue is about $14.8 million (about K12.04 billion) higher than the $72.1 million (about K58.68 billion) earned during the same time last year.
During the same period last year, average price per kilogramme (kg) was seen at $1.51 (about K1229.14) compared to $1.64 (about K1334.96) per kg the leaf is fetching now.
In an interview, AHL Group spokesperson Teresa Ndanga said farmers produced good quality tobacco, which is a major contributor to the good prices.
She said: “The country has this year also produced lesser volumes than the buyer’s demands. And so, the better prices this year are as a result of the combination of good quality leaf and lower supply.”
Last year, the country earned $174 million (about K134 billion) against $237 million (about K182 billion) earned in 2019, representing a 27 percent drop.
Despite the drop in revenue, Tobacco has remained the country’s main forex earner and contributes about 15 percent to the country’s gross domestic product.
The first-round of crop estimates in March this year showed that the country was expected to produce 122 million kilogrammes of tobacco against buyers’ demand of 132 million kilogrammes.