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| Business |
| Non-auction tobacco sales start in Lilongwe |
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by
Aubrey Mchulu, 26 February 2004
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14:49:06
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Tobacco sales started at the Lilongwe Auction Floors on Tuesday this week with 300 bales from farmers who were sponsored to grow flue-cured tobacco at predetermined prices that ranged from about K86 to K231 (US$0.80 to US$2.14) per kilogramme depending on grade.
Tobacco Control Commission general manager Godfrey Chapola said in an interview Thursday more sales of the country’s major foreign exchange earner at the Lilongwe floors are expected next week.
He said the non-auction sales of the sponsored flue-cured tobacco were yet to start at the Limbe floors but he ruled out such sales at Mzuzu floors because, he said, most of the sponsors of the flue-cured tobacco are based in the Central and Southern Regions hence farmers from the North will have to sell in Lilongwe.
Commenting on the apparent slow in-flow of tobacco to the floors, Chapola said he was not worried with the situation because this is only February and most farmers are concentrating on curing their crop on farms to create storage space in their barns.
“There is a lot of tobacco on the farms, that I can assure you. We opened the market early to give growers who were ready an opportunity to sell because farmers are our paymaster,” he said.
Sales of the sponsored flue-cured tobacco failed to start as scheduled on February 16, 2004 because growers did not take their leaf to the auction floors.
The tobacco industry is expecting 14 million kgs of flue-cured tobacco from a total of 141.7 million kgs out of which 115 million kgs is the flagship burley.
Normal auction sales for burley and other non-sponsored tobacco will start on March 22 and will close in September, according to Chapola.
Finance Minister Friday Jumbe said three weeks ago he was banking on tobacco sales and donors’ goodwill to boost foreign reserves currently standing at 1.9 months of import cover.
But financial securities firm, Continental Discount House said in its January 2004 economic review that even with early tobacco sales, it will not be easy for Malawi to mobilise adequate foreign exchange within the month to stabilise the kwacha.
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