Malawi’s tobacco growers suffering
Tobacco growers in Malawi are suffering because they have been left with 45 million kg of unsold leaf, according to a story in The Nyasa Times.
The story described this as a ‘[t]ime of great stress and danger’ that was ‘crippling Malawian tobacco farmers’.
The 45 million kg is said to be the difference between what Malawi’s ‘key tobacco buyers’ told the tobacco regulator, the Tobacco Control Commission (TCC), would be their requirement ceiling for the 2015/2016 tobacco growing season, 120 million kg, and what the growers produced, more than 165 million kg.
Speaking in an exclusive interview with the Times, Alliance One Tobacco Malawi managing director, Hugh Sunders, who is also chairperson for the Tobacco Exporters Association of Malawi, said that while tobacco buying companies always submitted their requirements to the TCC, local tobacco growers still over-produced the crop.
“Over production is a big problem at the moment here in Malawi; we know these farmers have families to take care of, so the question sometimes is, if we don’t buy the extra kilograms of the leaf where else are they going to sell it?” said Sunders.
He said the tobacco buying industry was facing a lot of challenges, which included over-taxation due to the global anti-tobacco smoking campaign being championed by the World Health Organization.
And he said that there was a need to regulate the local tobacco production fully in order to create a better demand/supply situation, which, in turn, would enable farmers to sell their leaf at a better price.
There was no mention of what prices had been paid for the 120 million kg of tobacco that had been sold, which should have been good, given that only the fully regulated quantity had been sold.
But according to a Malawi24.com story in late July, buyers were taking advantage of the ‘high supply’ of tobacco on Malawi’s market to offer prices that ‘are not favorable’ to farmers.
The CEO of the Tobacco Association of Malawi (TAMA) Graham Kunimba was quoted as saying that the tobacco sold at auction was ‘pegging at’ US$0.92 per kg while tobacco sold by contract was ‘going at’ $1.45 per kg.
He was said to have described the situation as ‘not a good development’.
“The overall supply of tobacco on the market is higher than demand and this is prompting buyers to have a selective type of buying,” he said.
According to Kunimba, this year’s overall average of prices was at that time 12 percent lower than that of last year.