Editors PickNational News

Tobacco sales suspended in LL

Burley tobacco sales at the Lilongwe Auction Floors suffered a setback on Tuesday as growers blocked the auction system due to high rejection rates pegged at 60 percent.

Tobacco Control Commission (TCC) chief executive officer Bruce Munthali said in an interview the burley tobacco sales are scheduled to resume today (Wednesday) as the commission is engaging the growers and the buying companies in talks.

Munthali: It is not something to worry about
Munthali: It is not something to worry about

He said there is high rejection rate because there was low participation of buying companies on the auction system.

Munthali said he is optimistic that the entire crop will be sold by the end of the marketing season in mid August.

He said: “These things happen. It is not something to worry about as we are engaging the buyers in talks.”

Munthali said the tolerable rejection rate ranges from 20 percent and below.

However, he applauded Limbe Auction Floors, which concluded sales yesterday, as the market that had less disruptions and a two percent rejection rate on contract sales during this year’s marketing season.

In another interview, AHL Group corporate affairs manager Mark Ndipita said growers yesterday insisted on meeting the buyers to voice out their concerns.

He said at the meeting the growers complained about disparities as tobacco of the same grade fetched less on auction system compared to contract.

Ndipita also said growers lamented the numerous times they travel to the auction floors when their tobacco has been rejected as time consuming and money wasting.

He said the farmers further stated that the quality of the leaf is compromised after being re-handled; hence, attracting lower prices on the market.

On the part of buyers, Ndipita said it transpired during the meeting that the buyers have enough leaf from contract growers; hence, will only be buying tobacco sold on auction to help out the growers.

According to Ndipita, there are two companies buying on auction only—African Tobacco Services (ATS) and Associated Tobacco Company—which have small orders and cannot satisfy the current demand. He said the bigger and traditional buyers have enough stocks from contract growers.

As of yesterday, 143 million kilogrammes (kg) of tobacco out of the estimated 170 million kg had been sold at $256 million while 136 million kg had been sold attracting, $246 million during the same period in 2014 with 30 percent rejection rate.

On average, tobacco fetches at least $300 million annually.

Related Articles

Back to top button