(NYASATIMES) Tobacco sales continue with good prices at Malawi Auction Floors

Tobacco sales continue with good prices at Malawi Auction Floors
By Nyasa Times
Published: March 16, 2010

The new market season for tobacco entered its second day in the capital Lilongwe with captains of industry expressing satisfaction with the prices.

Government recently decreed that the minimum price for burley tobacco should be US$ 2 per kilogramme, down from US$ 2.15 last year, while the minimum price for flue-cured tobacco was reduced to US$ 3 per kilogramme from US$ 3.9 last year.

On the second day of the sale, a kilogramme of burley tobacco was fetching at least US$2 50 cents, a price which is above the government’s set minimum price of 2 dollars.

Bruce Munthali, Tobacco Control Commission (TCC) Chief Executive Officer, said he was optimistic that this year’s season would be more successful than the previous ones.

Munthali observed that “low quality leaf was attracting good prices”, a development which he said was not the case last season.

The TCC’s Chief Executive Officer added that “the number of rejected bales is likely to decrease as competition among buyers is high due to low production of the leaf this year”.

But farmers were cautious saying it was too early to start celebrating considering that buyers have been unpredictable in the past few years.

Meanwhile, TCC has intensified its preparations for the opening of the Limbe Auction Floors on Wednesday

Tobacco is Malawi’s chief foreign exchange earner which accounts for over 30 per cent of the country’s Gross Domestic Product and contributes up to 23 per cent in all tax collections.

More than 75 per cent of all foreign exchange earnings is derived from tobacco. And, more significantly, at least 80 per cent of Malawians directly and indirectly depends on the tobacco industry.