Leaf glut depresses prices
Tobacco farmers sold $275.7 million worth of leaf during Malawi’s 2016 marketing season, reports Mavari Post.
Despite higher sales volumes, earnings declined because of high rejection rates and poor prices, according to Mark Ndipita corporate affairs manager at Auction Holdings Ltd.
In 2015, farmers earned $337 million from leaf sales.
The average price this season was $1.42 per kg, compared with last year’s $1.75 per kg.
The Tobacco Control Commission (TCC) attributed the decline in leaf prices to overproduction, which necessitated the extension of the selling season.
Burley tobacco production alone was in excess by 43 million kg, TCC Executive Director Albert Changaya said.
To prevent excess production in the 2016-2017 growing season, TCC announced it would enforce strict quotas on farmers.