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A total of 26 million kilogrammes of tobacco were sold at the auction floors in the first nine weeks of the season, realising about K3 billion (US$28 million), the Tobacco Control Commission (TCC) has said.
Figures from the TCC indicate that the volume and value of tobacco sold at the floors continue to take a nose dive with last year recording better average prices and volumes at the floors than this year.
The figures which cover weeks between March 10 and May 8 show that this year a total of 26,019,147 kgs of tobacco were sold at an average price of US$1.07 (K99.57) as compared to US$59,313,787 raised over the same period last year from 49,214,634 kgs at an average price of $1.21/kg (K112.08).
Tobacco, which accounts for over 60 percent of Malawi’s total exports and contributes more than 10 percent to the Gross Domestic Product (GDP), has over the past two years been hit by low prices at the floors, resulting in accusations and counter accusations between growers and buyers.
Despite desperate calls for higher prices from growers and government, buyers have stood their ground, declaring that they will not succumb to such demands of unstable prices on the world market.
Cultivated by nearly 18.9 percent of the small holder households totalling to 375,000 farmers, the cash crop is crucial to the economic stability of the country which heavily relies on agriculture and donor funds.
Tobacco Exporters Association of Malawi (Team) chairman Charles Graham said last week that it will be hard for the industry to see a price of more than $2 (about K187) per kg on the market this season.
Market analysts estimate that the country will this year realise K16.9 billion ($175 million) from tobacco receipts if the crop is sold at K109.20 ($1.20) per kg.
The proceeds are expected to prop up the economy from a two-year recession largely stemming from donor aid freeze of about K7 billion ($75 million) budgetary support.
Statistics on crop assessments released late March indicated that this season the industry would produce 145.6 million kgs of tobacco out of which 127 million kgs would be burley tobacco.
An estimated 15.8 million kgs of flue cured, 2.2 million kgs of Northern Division Dark Fired (NDDF) and 586,000 kgs of Southern Division Fired (SDF) tobacco are anticipated this year.
The first week of this season—March 10 to 13 — sold a total of 336,684 at the total value of $375,360 at an average price of $1.11 while week nine—from May 2 to May 8—sold 123,509 kgs at the mean price of US$1.30 to raise $160,409.
However, the ninth week of 2002 which was from May 24 to May 30 sold a total of 398,142 kgs of tobacco to raise 691,015 at an average price of $173.56.
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