Tobacco sales have not been satisfactory this year, especially on the auction market as evidenced by statistics, which show that only 13 percent has been sold under the system.
This is in contrast to the agreement that 80 percent of the leaf should be sold under integrated production system (IPS) with the remaining 20 percent under auction.
AHL Group corporate affairs manager Mark Ndipita said in an interview on Tuesday the performance tobacco marketing this season is gloomy largely due to high rejection rates, peaking at as high as 90 percent, which have characterised this year’s season.
“Some farmers are still coming to the floors every week, but their bales continue to be rejected, which is also affecting the quality of the leaf.
“The worrying thing is that rainy season is fast approaching, but we still have bales that are yet to be sold,” he said.
Ndipita said the country is now feeling the pinch of the leaf’s supply glut, reduced competition on auction market and the effect of allowing merchants to recruit non-funded growers into contract even though they were not supported in any way in terms of extension advice, loans and inputs.
In an earlier interview, Farmers Union of Malawi (FUM) president Alfred Kapichira-Banda faulted the Tobacco Control Commission (TCC) for the continued reduced demand of the country’s main forex earner, calling on authorities to start looking for other markets for the country’s leaf.
But Tobacco Control Commission (TCC) chief executive officer Albert Changaya, while acknowledging receiving complaints from farmers, wondered why some of the farmers have not had their leaf sold.
“As a commission, we have just learned that there are some farmers who are yet to sell their tobacco. It is very unfortunate that they could stay for this long without selling even a single bale of tobacco.
“But again, the question would rest on what they have been doing all along to ensure that they sell their tobacco,” he said.
This year, buyers’ demand for the leaf was pegged at 171.1 million kilogrammes (kg) for all types of tobacco, down from last year’s 178.2 million kg.
Earnings from the leaf are expected to drop by about 30 percent this year owing to low prices. n