Tobacco earnings projection revised

This year's tobacco sales will earn farmers much lower than earlier estimated, with a shortfall of up to US$30 million, Tobacco Control Commission (TCC) has said ahead of the closing of the market this month end.

In an interview with the press in Mangochi on Monday, TCC Chief Executive Officer Bruce Munthali disclosed that the development is due to lower prices than expected towards the end of this year's market, although the prices are relatively higher than before.

"We have revised the earnings; we will not realise the US$300 million as we projected earlier. The market will be getting about US$270 million, but indications are that we might get up to US$280 million looking at how the market is performing," said Munthali.

During a similar period last year, the market realised about US$410 million at a unit price of US$190 dollars per kilogram from the same volumes, according to TCC.

The market is yet to sell the remaining 15 million kilograms which Munthali said could be finished by 30 November as President Bingu wa Muthalika is said to have issued a directive that all the tobacco on the market should be sold either by the traditional buyers or government.

TCC chairperson Gamaliel Bandawe, in a separate interview, said this year's sales low earnings have not just affected the farmers but they have affected other markets that benefit from tobacco.

"Farmers have not bought items as they used to do during the market season and that for sure has affected the economy at large," said Gamaliel.

However, the TCC CEO said the issue of poor tobacco prices has not affected the Malawi market only as other neighbouring countries have witnessed the worst prices as evidenced by the influx of tobacco volumes from there.

The tobacco farmers are expected to produce a maximum of 160 kilograms of burley and a maximum of 25 million kilograms for the next season, as TCC expects better prices due to production as required by the demand.