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Cross-border tobacco trade in the Central Region is said to have been reduced to zero, a development which has seen the Auction Holdings Limited (AHL) registering more growers awaiting to sell their leaf at the floors.
Chalesi Ndalora, a farmer from Mchinji who used to sell his tobacco at Chipata in Zambia, said this year’s prices for the leaf have somehow improved compared to previous years.
He said unlike last year when the leaf was selling at the auction floors at an average of US$0.40 (baout K54.00) per kilogramme, this year the tobacco was fetching an average of US$0.70 (about K94.50) per kg.
When asked whether the change in price meant that this year’s tobacco prices were better, Ndalora said no tobacco can be said to be selling better at below US$1 (about K135) per kg. He said the prices are still below the cost of production.
“We are not saying the change in price will make us make profits, but compared to the transportation costs and accommodation that we incur when travelling to the neighbouring countries, it’s better to sell right here,” he said.
But Tobacco Association of Malawi (Tama) Executive Secretary Felix Mkumba attributed the change to the introduction of tax and levies by the Zambian government.
“There are some new developments on the Zambian side. I am told that they have started taxing tobacco so much that people are not as motivated as in the past since they were running away from taxes in Malawi,” he said.
Mkumba said although cross-border trading poses a big set back to the tobacco industry, the legislation attached to it was very weak that nothing has since changed the situation of late.
“Tama cannot afford to put or enforce that to happen although we have tried to conduct educational visits but the regulating body [Tobacco Control Commissio—TCC] is responsible for that,” he said
TCC General Manager Godfrey Chapola confirmed in an interview that his office has not heard any reports of cross-border trade this year.
“It’s illegal to take tobacco across borders without a licence. No licence has been issued to an individual grower ever since except for the buying companies,” he said.
Chapola said although patrols are conducted around the borders, it was difficult to track down the offenders since, he said, the borders are too big and porous.
Last year, it was reported that tonnes of tobacco were ferried abroad through Chipata, Dedza and Songwe borders.
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