Tag Archives: Tobacco season

Business

Tobacco earnings soaring: country realizes US$12.5 million in three weeks

Henry Chizimba
tobacco season has realized US 12.513 million dollars

LILONGWE-(MaraviPost)-Malawi has realized US$12.513 million for the first three weeks since the official opening of the tobacco marketing season, on April 10, this year.

This is latest statistics obtained at AHL Group as of April 27, 2017 and that about 7,493,333 kilograms (kgs) of tobacco of all types have been sold at an average price of US1.67 per kg.

This year’s green gold prices, started at good buying rate when compared to that of last year during a similar period, which was at average prices hovering below the US$1.5 per kg mark.

It is not a wonder that last week farmers were visibly happy with the “green-gold sales” at Limbe Auction Floors in Blantyre, over the good prices offered coupled with low rejection rates.

Sale sheets the Maravi Post sourced from farmers, show that prices range from 80 cents (MK586) per kilongram (kg) to US$2.20 (MK1,612.06) per kg.

These prices differ from those on last year’s opening day, when the leaf was pegged between 80 cents and US$1.40 (MK1,026.02).

The rejection rate this year also started at 1.8%, while in 2016, it was at 52 percent; meaning that the tobacco sales have started on a high note. Expectations are that Malawi farmers will keep on smiling all the way to the bank.

Both Tobacco Control Commission (TCC), and AHL Group, attributed the cause for better prices and low rejection rates, to proper handing and presentation of the leaf before the floors, which they said all farmers must emulate.

In 2016, a total of 194 million kgs of tobacco was sold at an average of US$1.42 per kg, in which the country realized US275 million. This was a drop from US$362 million of 168 million kg of tobacco sold in 2015.

In 2017, Malawi has produced 126 million kilograms of tobacco, against a requirement of 150 million kgs by buyers.

Malawi

Malawi tobacco market closed: US$275.7 million realized, earnings drop by 18%

Maravi Post correspondent
Tobacco market closed

LILONGWE-(MaraviPost) – The country’s tobacco marketing season has finally closed after 37 weeks of trading with US$275.7 million earnings less than that of last year.

The market has been closed with tobacco fetching US$1.42 per kilogram as compared to last year’s US$1.75 per kg.

This year’s marketing season revenue has dropped by 18 percent with total amount realized marked at US$61 million. In 2015, Malawi realized US$337 million from the green gold after 27 weeks of sales.
The drop in earnings has been attributed to poor prices and high rejection rates which peaked at as high as 98% at some point during the trading of the crop.

This year’s marketing season was extended to December, exceeding the normal sales closing months of September and October.
Auction Holdings Limited (AHL) Corporate Affairs Manager, Mark Ndipita said this year’s selling season has absorbed a lot of tobacco than in 2015 though with less earnings.
Tobacco Control Commission (TCC) has however attributed dangling of the country’s green gold prices for past three years and 2016 inclusive marketing season to overproduction.

Overproduction of 30 million kilogram yearly has been registered mainly on burley tobacco which buyers are unable to fit in with their buying power. For instance, this year buyers were looking for 132.5 million kilograms against an estimated local production of 165 million kilograms.

As a result tobacco buyers have already given 151 million kilogram ceiling of all types of tobacco in the next season.

“Normally, the market closes after 24 or 25 weeks of trading. Overproduction necessitated the extensions of the selling season. We ended up with 175 million barley alone against the trade requirement 132 million, meaning that 43 million kilograms were in excess”, observed TCC Executive Director Albert Changaya.

This has prompted TCC to start enforcing strict quotas on farmers to remain within the required volume of tobacco in 2016/2017 growing season.

The new system which is dubbed as Farmers Management System (FMS) will require growers to provide information about their fields when applying for quota licenses.