(NYASATIMES) Buyers reject Malawi’s flue cured tobacco

Buyers reject Malawi’s flue cured tobacco
By Nyasa Times
Published: May 10, 2011

It has become evident that despite full-throated intimidations from Malawi’s President Bingu wa Mutharika and his cohorts, tobacco buyers in the country are not ready to budge an inch.

Since the tobacco market opened on March 16 this year, the leaf has been fetching unbelievably low prices with very high rates of bales being rejected at all the auction floors. The development has resulted in several suspensions of the sales for all stakeholders to meet in an attempt to find a lasting solution to the problems.

Limbe has so far recorded the worse rejection rate for burley tobacco at 89.6 percent. But on Friday, the auction floors hit another record when buyers refused to buy flue cured tobacco at the opening of the category’s 2011 sales season.

Tobacco being auctioned while President Mutharika looks on at the back

Flue cured tobacco, which is primarily grown by white farmers and a few well-off Malawians due to its involving and complex drying process, fetches relatively higher prices than burley and its market usually starts late.

The white farmers who had high expectations that the sales would favour them because of their skin colour were in for a kick in the teeth when 90 percent of their bales were rejected. The buyers bluntly told the white farmers they were not ready to start buying flue cured tobacco at the moment.

Tobacco Control Commission (TCC) Regional Manager for the South, Richard Chimthunzi, confirmed the sad development saying his office was still puzzled with the conduct of the buyers.

On its opening day (Friday), there were about 2000 bales of flue cured tobacco bales and the less than 200 that were sold went at K310 per kg with the lowest price being K80/kg.

Some farmers have reacted angrily saying the prices for the crop are ridiculous and it is better for them to sell their crop outside the country. Most of them have opted to take their bales out of market and have indicated that they would sell through contract buyers.

But in a positive development, tobacco rejection rate for burley at the Limbe Auction Floors has drastically dropped raising hopes of better sales in the coming days, Chinthuzi.

This comes after growers at the floors chased away buyers demanding indefinite closure of the market and also the several meetings that have been taking place where stakeholders such as growers, government officials, buyers and officials from TCC have been discussing the situation.

On Monday, Mutharika expressed deep concern when he officially opened the 2011 tobacco marketing season at Mzuzu Auction floors over this year’s high rate of tobacco rejections and the low prices.

“I do not understand why the leaf is rejected by buyers, yet the buyers say Malawi burley is one of the best in the world. I will not allow the buyers to sabotage the economy of the country through rejection and buying the good leaf at low prices,” Mutharika told hundreds of people.

“Tobacco farmers continue to be poor and poorer, yet they toil night and day but do not benefit in the end,” he added.

Chairperson of Auction Holdings Limited, Dr Charles Matabwa said there were plans to extend Mzuzu Auction Floors to enable it sell about 8,000 bales per day from the current 5,000 a day.—(Reporting by Green Muheya, Nyasa Times)