This years tobacco sales entered their second week yesterday with the Tobacco Control Commission (TCC) hoping that better prices being offered by buyers will continue.
TCC general manager Godfrey Chapola said in an interview yesterday so far buyers are expected to stick to minimum prices set by government.
From last Wednesday when the floors opened buyers have been sticking to the fixed minimum prices that were set. These prices were arrived at after considering the cost of production of the crop from nursery to the auction floors.
Therefore, we expect better prices to continue as no buyer will be allowed to buy below the minimum price. Those buyers who do not want to follow these new minimum prices will be punished, said Chapola.
Official figures indicate that a farmer in Malawi spends about a dollar (about K140) to produce a kilogramme of tobacco.
So far government through TCC has set up 76 grades for tobacco each with a fixed minimum price tag, according to Chapola.
When Lilongwe Auction Floors opened on Wednesday, farmers sold their crop between US$1.70 (about K238) and US$1.60 (K224) per kilogramme compared to last year when the leaf fetched about US$1 per (K140) kilogramme during the opening weeks.
However, the challenge now is to send good graded tobacco to the auction floors. Most of the farmers are failing to do so. My appeal to them is to improve on the grading system, but also to avoid mixing the crop with other non-tobacco items such as plastic paper when sending to the auction floors, said Denis Dias, a Tobacco Association of Malawi (Tama) councillor for Mangochi Area 5. So far, so good, we have started so well considering that this is the first crop.
Limbe Leaf Tobacco Company, in which Swiss-registered Continental Tobacco Company has majority stakes and US-based Alliance One Tobacco are the active buyers who were last year ordered by President Bingu wa Mutharika to leave the country or offer better prices.
Government imposed a minimum price of US$1.10 per kg for low grade and US$1.70 per kg for higher grade leaf but buyers ignored that.
For over 10 years tobacco prices have hovered between US$0.70 and US$0.90 per kg.
In a bid to foster competitive behavior on the tobacco market this year, government registered another international buyer, US-based Premier Leaf in which Tama is local shareholder.
Tobacco accounts for over 60 percent of Malawis exports and 15 percent of its gross domestic product, but for the last two years low prices have led to cuts in production and this years low production dropped to 141,000 tonnes from 158,000 tonnes last year








Papsa tong'ola, I hope farmers will enjoy with Bingus era.