Tag: Malawi

  • Universal Welcomes Clearance of Imports

    Universal Welcomes Clearance of Imports

    Photo: Taco Tuinstra

    Universal Corp. has welcomed a decision by U.S. Customs and Border Protection (CBP) to admit imports from its Limbe Leaf Tobacco Co. subsidiary in Malawi.

    On Nov. 1, 2019, CBP issued a withhold release order (WRO) on imports into the U.S. of tobacco from Malawi based on a suspicion that forced labor was used in Malawi to produce the country’s tobacco crop.

    Universal Corp. subsequently filed a comprehensive explanation of Limbe Leaf’s supply chain social compliance program, its efforts to identify and minimize the risks of forced labor on contracted farms from which it purchases tobacco in Malawi, and its ability to trace such tobacco once processed and shipped from the shipping vessel back to the individual farms on which it was produced.

    CBP evaluated the company’s filing and concluded that Limbe Leaf’s program and on-farm efforts produced evidence that sufficiently supported the company’s claims that tobacco purchased from Limbe Leaf is not produced or harvested using forced labor.

    The agency recently confirmed that tobacco imported from Limbe Leaf is again admissible at all U.S. ports of entry.

     “Universal Corporation is committed to the sustainable production of tobacco,” said George C. Freeman III, chairman, president and CEO of Universal Corp. “Our commitment is evidenced by our Agricultural Labor Practices program and other sustainability policies, and by the implementation and maintenance of those programs and policies by our operations around the world. We are proud of Limbe Leaf’s dedication to the sustainable production of tobacco in Malawi, and we appreciate CBP’s recognition of those efforts.”

    Earlier this year, CBP cleared Malawi tobacco sold by Alliance One International for entry into the U.S.

  • Malawi Takes Heart From IQOS Approval

    Malawi Takes Heart From IQOS Approval

    Photo: Taco Tuinstra

    Tobacco growers in Malawi are hoping that recent marketing orders by the U.S. Food and Drug Administration (FDA) for Philip Morris International’s (PMI) IQOS tobacco-heating device will translate into greater demand for their leaf, according to an article in The Nyasa Times.
     
    One of the world’s leading producers of burley tobacco, Malawi has seen demand for its primary export drop in recent years due to growing health awareness and anti-smoking measures worldwide.
     
    In 2019, Malawi realized only about $232 million after selling 160 million kg of all types of tobacco. By comparison, the country earned $361 million from the sale of 192 million kg in 2014.
     
    On July 7, the FDA issued exposure modification orders to PMI, allowing the company tell consumers that IQOS produces fewer harmful and potentially harmful chemicals than combustible cigarettes. Earlier, the agency approved PMI’s premarket tobacco product application, allowing PMI to sell IQOS in the U.S.
     
    The marketing orders are expected to boost demand for IQOS.
     
    Tobacco remains Malawi’s top foreign exchange earner.

  • U.S. Clears Limbe Leaf Imports From Malawi

    U.S. Clears Limbe Leaf Imports From Malawi

    Photo: Taco Tuinstra

    U.S. Customs and Border Protection (CBP) has cleared tobacco imports from Malawi by Limbe Leaf Tobacco Co.

    As of July 31, tobacco imported from Limbe Leaf is again admissible at all U.S. ports of entry. CBP previously denied these tobacco imports entry into the United States based on suspicion that they were produced using forced labor.

    CBP lifted its ban based on a rigorous evaluation of Limbe Leaf’s social compliance program and efforts to identify and minimize the risks of forced labor from its supply chain. According to the agency, these actions produced evidence that sufficiently supports the company’s claims that tobacco from its farms is not produced and harvested using forced labor.

    Earlier this year, CBP cleared Malawi tobacco sold by Alliance One International for entry into the U.S.

  • Tobacco Earnings Top $110 million

    Tobacco Earnings Top $110 million

    Photo: Taco Tuinstra

    Malawi has earned $110.2 million from tobacco sales since the start of the marketing season 11 weeks ago, reports Xinhua News Agency

    According to recent statistics from Auction Holdings Limited (AHL) Malawi, tobacco markets across the country have traded 72.7 million kg of leaf at an average price of $1.51 per kg.

    Tobacco growers have expressed dissatisfaction with the current prices, but Tobacco Commission CEO Kaisi Sadala said he expects prices to increase as new buyers enter the country.

    “The coming in of new buyers into the country means that there is going to be some kind of competition on the market hence the rise of prices; farmers should not lose hope, rather they should keep bringing their good quality products to the markets,” said Sadala.

    Tobacco is Malawi’s biggest export crop, accounting for more than 50 percent of all foreign currency receipts.

  • U.S. Customs Clears Malawi Imports

    U.S. Customs Clears Malawi Imports

    Tobacco being prepared for export in Lilongwe. Photo: Taco Tuinstra

    U.S. Customs and Border Protection (CBP) modified a withhold release order (WRO) such that tobacco imported from Malawi by Alliance One International will be admissible at all U.S. ports of entry effective June 3, 2020. CBP previously prevented these tobacco imports from entering the United States based on reasonable suspicion that they were produced using forced labor.

    CBP modified the WRO based on a rigorous evaluation of Alliance One International’s social compliance program and efforts to identify and minimize the risks of forced labor from its supply chain. These actions produced evidence that sufficiently supports Alliance One International’s claim that the tobacco produced and harvested from their farms does not use forced labor.

    The WRO continues to apply to imports of tobacco from Malawi by any company that has not demonstrated to CBP that there is no forced labor in its supply chain.

    “CBP recognizes the impact that withhold release orders have on importers and exporters, therefore we diligently work to carefully and thoroughly review petitions and admissibility requests,” said Brenda Smith, executive assistant commissioner of CBP’s office of trade. “If companies demonstrate that there is no forced labor in their supply chain, we will modify the withhold release order to exclude them.”

  • Malawi Farmers Pull Leaf, Citing Below-Cost Prices

    Malawi Farmers Pull Leaf, Citing Below-Cost Prices

    Photo: Taco Tuinstra

    Farmers from Dowa and Lilongwe have pulled their tobacco from the auction floor due to low selling prices.

    The average selling price of the tobacco has been $1.10, which farmers say is not enough to cover production costs. The farmers have reached out to officials from Limbe Leaf Tobacco and the Tobacco Commission.

    “These buyers are leaving us in slavery,” said Bazale Mobayana, one of the farmers. “They are leaving us with huge debt to settle because with these low prices, we cannot be able to repay back the loans we took from commercial banks and other financial lending institutions.”

  • Malawi crop confirmed

    Malawi crop confirmed

    The torrential rain associated with Cyclone Idai has not affected tobacco production in Malawi, according to a story in The Maravi Post quoting the Tobacco Control Commission (TCC).

    The rain has caused devastating floods in some parts of the country, but, reportedly, not in the areas where tobacco is grown.

    Addressing the Media Network on Tobacco (MNT) on Wednesday in the capital, Lilongwe, TCC CEO, Kayisi Sadala said a second crop estimate had put tobacco production at 205.5 million kg, fractionally more than that of the previous season, 202 million kg.

    Meanwhile, the MNT acting vice chairperson, Arnold Mnelemba, reminded the TCC of child labor issues, saying they were critical and needed to be addressed.

    He said, too, that there was a need for a program of afforestation to make the growing of the crop sustainable.

  • Malawi volume increased

    Malawi volume increased

    A preliminary report by Malawi’s Tobacco Control Commission (TCC) suggests that this year’s tobacco crop volume, at about 206 million kg, is broadly similar to that of last season, 202 million kg, according to a story in The Maravi Post.

    The TCC is due to undertake a second crop survey from February 25 to March 3, and the results of this survey will be used to determine the opening dates for the marketing season.

    Speaking in the capital Lilongwe on Tuesday, TCC CEO Kayisi Sadala attributed this year’s increased tobacco volume to last year’s ‘good marketing season’, though Sadala did not say for whom it was good.

    And it was noticeable that though the 2018 marketing season was described as good, there was no mention of grower prices, which a Reuters piece in October had said were down by 16.5 percent on those of 2017.

    So it would be valid to speculate that the increased volume could be down to a whole range of factors from the weather to poor prices last season having persuaded growers that the only way to increase their incomes was through volumes.

    Last month, the Foundation for a Smoke-Free World said that a 2016 study had found that only 25 percent of Malawian tobacco farmers were content with the prices they received in 2014, and that about 41 percent of all tobacco farmers had considered switching to alternative crops or livelihoods.

    And it seems unlikely that grower sentiment would have changed greatly because the Foundation said also that farm-gate prices of tobacco in Malawi had fallen by 54 percent between 2012 and 2016.

    Even given a ‘good marketing season’ in 2017, grower prices are likely to be below those of 2012.

    One factor that would tend to indicate that the 2019 season is unlikely to be a good one for growers is that, according to the story, the volume this season is 35 percent up on the 152 million kg that buyers had demanded.

  • Rewarded with lower prices

    Rewarded with lower prices

    The Tobacco Association of Malawi (TAMA) has urged the Government to improve security at the country’s borders to help stop leaf tobacco smuggling, according to a Malawi24 story.

    Speaking at the 2019 TAMA annual meeting, the Association’s president, Kalima Banda, said curbing tobacco smuggling would ensure that Malawian tobacco growers were rewarded for their hard work.

    Banda said that producing tobacco involved a lot of hard work and resources, and that growers needed to be rewarded.

    But growers had to tend their tobacco with care to attract better prices, once this year’s marketing season started.

    Banda advised tobacco growers not to sell their crop to middlemen, saying they should wait for the opening of the auction floors, where they could sell their crop at better prices.

    It will be interesting to see whether the tobacco growers heed Banda’s warnings.

    Last month, the Foundation for a Smoke-Free World said that a 2016 study found that only 25 percent of Malawian tobacco farmers were content with the prices they received in 2014, and that about 41 percent of all tobacco farmers had considered switching to alternative crops or livelihoods.

    About 45 percent of all tobacco farmers in Malawi were said by the Foundation to be contract farmers, but no statistically significant differences between independent and contract farmers were found in price satisfaction and desire to switch.

    Crucially, the Foundation, which was focusing initially on Malawi as part of its Agricultural Transformation Initiative, said farm-gate prices of tobacco in Malawi had fallen by 54 percent between 2012 and 2016.

  • Addressing tobacco poverty

    Addressing tobacco poverty

    The mission of the Foundation for a Smoke-Free World’s Agricultural Transformation Initiative (ATI) is to prepare smallholder tobacco farmers for an era of significantly reduced demand for tobacco, focusing first on populations with the greatest need, according to a piece posted on the Foundation’s website.

    The initial focus will be on Malawi.

    The piece starts by admitting that growing tobacco has never lifted smallholder farmers out of poverty.

    But it then goes on to say that high-quality data and rigorous analysis can shape and inform effective, evidence-based policy creation and resource deployment to diversify economies and lessen country dependence on tobacco – better preparing farmers for the future while strengthening their countries’ economies.

    ‘The mission of the Foundation’s … ATI … is to prepare smallholder tobacco farmers for an era of significantly reduced demand for tobacco, focusing first on populations with the greatest need,’ the Foundation says. ‘The ATI will use this opportunity to facilitate the establishment of more secure income strategies for farmers and will seek to partner with a diverse set of stakeholders to ensure the success and sustainability of our strategy. ATI activities will target the following outcomes:

    1. ‘Higher and more secure income streams, improved food security status, and better overall health for smallholder farmers, their families, and their communities more broadly
    2. ‘Increased knowledge and application of cutting-edge agricultural science and technology
    3. ‘Reduced economic dependence on tobacco and increased resilience for tobacco-growing nations
    4. ‘Reduced environmental degradation due to tobacco cultivation
    5. ‘Improved nutritional quality and food security status

    ‘To achieve this, the ATI will employ a systems approach to understanding local contexts and potential points of intervention, coupled with an investment-oriented model of action. A systems-thinking approach is well suited for tackling complex development problems because it incorporates multifactor analysis and feedback loops to foster better decision-making. Focusing on investment, meanwhile, will ensure that each dollar spent is contributing to building capacity and strengthening local and national economies in a sustainable way – contributing, that is, to a better future for smallholder farmers, their families, and their communities…’

    Meanwhile, the piece singles out Malawi as being the country with a uniquely great need where the ATI will focus initially.

    According to the Foundation, a 2016 study found that only 25 percent of Malawian tobacco farmers were content with the prices they received in 2014, and about 41 percent of all tobacco farmers have considered switching to alternative crops or livelihoods. About 45percent of all tobacco farmers in Malawi are contract farmers, but no statistically significant differences between independent and contract farmers were found in price satisfaction and desire to switch.

    Farm-gate prices of tobacco in Malawi fell by 54 percent between 2012 and 2016.