Malawi confidence wobbles

Malawi’s President Peter Mutharika has warned people involved in smuggling leaf tobacco out of the country that they will be punished with an ‘iron hand’, according to a Malawi24.com story.

Mutharika issued his threat yesterday during the official opening of the 2017 tobacco marketing season at the Lilongwe Auction Floors.

He said he had instructed police and the army to man the borders so that no tobacco was smuggled out of the country.

Mutharika’s threat seemed like a bad omen for the marketing season, coming as it did immediately after the Tobacco Control Commission (TCC) had said it expected this year’s tobacco prices to be higher than last year’s because this year’s tobacco was of good quality and because there was high demand and low supply.

Last year, with prices down by more 20 percent and buyers refusing to purchase a considerable quantity of their tobacco, growers pleaded with the government to allow them to take it out of the country so as to find people who would buy it.

It seems that Mutharika is concerned that despite what the TCC believes, the market will again be slow and that growers will be tempted to try to ‘export’ their tobacco.

Mutharika asked buyers to offer good prices and not to discriminate against non-contract farmers.

And he urged growers to ensure that they offered good quality tobacco and to use dialogue whenever there were misunderstandings.

The call for good quality is something of a red herring. What might raise prices this year is the apparent shortage in the crop.