Maravi

Rise in tobacco prices has come too late, says Hannay

Rise in tobacco prices has come too late, says Hannay
By Joan Chirwa
Tuesday May 13, 2008 [03:00]

AN appreciable rise in tobacco prices has come too late when several farms have folded, a commercial farmer, Duncan Hannay, has said. Hannay, of Mkushi farm block, said poor production levels of tobacco recorded in the past few years was a result of unattractive prices of the commodity on the world market. He noted that a rise in tobacco prices this season would not transform the industry overnight, as many farmers had withdrawn from the trade as a result of poor pricing.

“I have grown 400 metric tonnes of tobacco. Production of tobacco has come down tremendously and this is all because world prices of the commodity were suppressed,” Hannay said. “The industry now looks more promising this year, but it is too late because a lot of farms have folded.”

After recoding a reduction during the previous season, production of Burley tobacco in the 2007/2008 farming season increased by 48.64 per cent from 5.38 million kilogrammes to eight million kilogrammes while yields of Virginia tobacco decreased by 40.48 per cent from 21 million kilogrammes to 12.5 kilogrammes.

A few years ago, Zambia used to boast of more than 30 million kilogrammes of tobacco production but the trend shifted soon after prices of the crop dwindled on the world market. This also affected the local market for tobacco since it is mainly an export crop.

Prices of high-grade tobacco in the country have this season almost doubled to around K8,000 per kilogramme, giving a major boost to an industry which was almost collapsing.

From an offer as low as K4,500 per kilogramme of high-grade tobacco during the previous marketing season, tobacco buyers have this year made a substantial upward adjustment to prices of the commodity.

For the past three to four years, prices of tobacco had been so unattractive; a situation that reduced annual production of the crop as most farmers withdrew from the trade.

Labels: DUNCAN HANNAY, MKUSHI FARM BLOCK, TOBACCO

posted by MrK @ 11:22 AM