Malawi moves to 80 per cent contract sales but prices not yet fixed

Malawi’s Tobacco Control Commission (TCC) has expressed optimism that the forthcoming tobacco growing season will see production increased and foreign exchange earnings boosted, according to a story by Kingsley Jassi for the Daily Times.

The TCC expects the country’s growers to produce about 184 million kg of tobacco next year, an amount that is said will be in line with demand.

Last season,Malawiproduced only 79 million kg, earning the country US$177 million.

TCC CEO, Bruce Munthali, said in an interview in Salima on Sunday that both production and market prospects for tobacco were looking positive for the country.

He said the contribution of tobacco to the country’s economic recovery efforts hinged on regulated production, improved quality, compliance issues and better unit prices; while in the long term, value addition and balanced diversification of tobacco varieties would be critical.

However, some growers in Salima sought assurance from the TCC on prices, given the expected increase in production and the switch to contract marketing where, so far, no prices have been agreed.

Munthali told the growers that the TCC was still discussing the details of the contract system with buyers.

“We had a meeting last week and we will continue to meet but the good thing is that even if the volumes increase, they will not surpass the demand as it used to be,” said Munthali.

Eighty per cent of this year’s sales are expected to be made through contracts and some observers believe that the government, under pressure from buyers, is moving too fast in phasing out auctions.