Maravi

(NYASATIMES) Trouble on Malawi tobacco sales

Trouble on Malawi tobacco sales
By Nyasa Times
Published: September 29, 2010

Wa Mutharika speaks out on foreign tobacco buyers deportation

Tobacco sales have restarted at the Lilongwe Auction Floors a week after the sale of Malawi’s major foreign exchange was suspended by angry growers last week Wednesday.

Growers had stopped the tobacco sale at the market, largest in Malawi angry with low prices prevailing so far this season and occurrences of more rejected or no sale bales by buyers.

After a week-long of a marathon of meetings between the two parties brokered by the Tobacco Control Commission (TCC) and Ministry of Agriculture, the sales have taken off at the Lilongwe floors with some promises to offload all the tobacco by mid October.

“The agreement has been reached that buyers will buy all the remaining bales at the Mzuzu and Lilongwe Auction Floors before mid October,” Margaret Mauwa, Deputy Minister of Agriculture, said at the floors.

The Lilongwe Auction Floors were scheduled to complete its selling season by mid September but market suspensions have prolonged the business at the market.

“This has also increased costs on the part of the market owners (Auction Holdings Limited) and even the farmers themselves because the floors still keep and pay staff beyond the agreed period while the farmers are paying the transporters who have not offloaded their bales todate,” said one official at the market.

Despite the deal, farmers are still angry with conduct by the buyers who are sending back tobacco through ‘no sale’ tags which means the bales have to be reoffered on the market.

“I have reoffered my 80 bales for eight times now and none of it has been bought, what they are looking for?” said Enos Amos a grower from Kasiya in Lilongwe.

There are over 70,000 bales of tobacco still unsold at the Lilongwe Auction Floors and over a hundred thousand bales still hanging at Mzuzu floors.

With this development of extended marketing season, experts are now worried that the production of the green gold will hit all time low next year as some farmers have not turned into their fields to prepare for the season ahead.

Microfinance companies who lend money and farm implements to tobacco farmers are also on the worried side. Most of the loans disbursed last year have not been repaid up to now signaling a dry cash coffer spell for new borrowers next season.

Economic experts have warned that Malawi needs to slowly turn into non-traditional cash crops such as pigeon peas, cut-flowers, and birds’ eye chilli to supplement its foreign exchange earnings. They warn that abrupt stop in producing tobacco will throw the economy into an abyss.

Tobacco earns about 60 percent of Malawi’s forex and still remains the major driver of economic survival for over 70 percent of Malawians directly and indirectly.

Labels: MALAWI, TOBACCO, TOBACCO CONTROL COMMISSION (MALAWI)

posted by MrK @ 10:05 AM