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| Business |
| Tobacco sales come to an end |
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by
Aubrey Mchulu, 03 November 2004
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17:30:46
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This year’s tobacco sales season, which was characterised by ups and downs, is expected to close this Friday at the Lilongwe floors and on November 19 at the Mzuzu market, the Tobacco Control Commission (TCC) said Tuesday.
TCC general manager Godfrey Chapola said in an interview that actual sales of the country’s number one foreign exchange earner in Lilongwe will close Wednesday.
“But officially we will be closing this Friday. That’s when we will have merit sales where everything will have to be sold,” he said.
On Mzuzu auction floors, Chapola said the current tobacco stocks in Mzuzu are expected to be sold by November 16 but the authorities have put a deadline of November 19 to finalise sales of all tobacco for the season.
Limbe tobacco auction floors were the first to close in September.
Buyers required between 155 and 167 million kilogrammes of all tobacco types with the flagship burley accounting for 140 million kilogrammes and by mid-October about 158 million kilogrammes valued at US$186 million had been sold.
This year’s tobacco sales were marred by a high presence of non tobacco related materials such as plastics in the leaf which made international buyers threaten to stop buying Malawi tobacco, among other things.
Chapola mentioned the plastics issue as one contributing factor to the crash in tobacco prices towards the end of the season.
Earnings from this season’s sales were expected to drop from the estimated K20 billion (US$182.6 million) due to a crash in dark-fired tobacco prices and plastic contamination in the leaf. However, earnings from tobacco as of October 14 were at US$186 million, according to a TCC weekly report.
In the 2004 tobacco marketing season progress report and projections dated May 10 this year, TCC said the country expected to earn about K20 billion in foreign exchange from this year’s sales representing a 26 percent increase in revenue over the 2003 earnings of K15 billion (US$145 million).
In July this year, President Bingu wa Mutharika warned tobacco buyers against exploitative prices at the auction floors.
Mutharika also lamented that although the country depends largely on tobacco for its foreign exchange earnings, the picture in the tobacco industry is not rosy because of the ongoing anti-smoking campaign and poor prices at the auction floors.
Mutharika described the auction floors prices as a reflection of neo-colonialist exploitation.
“It is a glaring example of neo-colonialism where somebody who is buying controls the price,” he said.
Two weeks ago a grouping of tobacco growers announced the formation of a parallel representative group called Tobacco Growers Association of Malawi (Toga) which they say will empower farmers to dictate prices at the floors.
Toga becomes the second body advocating for tobacco growers’ interests after the Tobacco Association of Malawi.
Toga executive director Jackson Mussa said in an interview in Blantyre on Monday last week its executive will be meeting buyers every year before the tobacco market opens to agree on bargaining and come up with a compromise floor price.
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