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Tobacco sales in slow start

Tobacco farmers expressed discontent at low prices offered on the opening day of the 2019 marketing season at the Lilongwe Auction Floors on Thursday.

Prior to the opening day, growers were upbeat, banking on the increase in minimum buying prices this year.

However, interviews with farmers at the Lilongwe Auction Floors revealed a growing sense of dissatisfaction.

The highest price for tobacco on the opening day was $2.20 and $2.30 on auction and contract markets, respectively, while the lowest price was $0.90.

The lowest price offered, was, however, slightly higher than the $0.80 buyers offered on the opening day of the 2018 season.

“We spent a lot of money on tobacco production and we owe a lot of people money. We had high hopes that we would earn more this season but we are not impressed with prices on the opening day,” one of the growers, Ernest Josaya, from Mpempha Village, Traditional Authority Kabudula in Lilongwe District, said.

Tobacco Association of Malawi President, Abiel Kalima Banda, was upbeat that prices would pick up.

Tanzania President John Magufuli and President Peter Mutharika graced the opening of the market.

Mutharika warned tobacco buyers against buying the crop below the set minimum prices.

Mutharika also announced that farmers selling less than 10 bales of tobacco would be exempted from paying withholding tax.

“I am committed to ensuring that farmers get good prices on all agriculture commodities including tobacco,” Mutharika said.

Magufuli, on the other had, said challenges rocking the local industry were also experienced in Tanzanzia.

He said this was emanating from factors such as falling prices on the international market, among other reasons.

Second round crop estimates showed that Malawi is expected to produce 205.5 million kilogrammes (kg) of tobacco this year.

The figure is, however, 35 percent higher than the 152 million kg tobacco-buying companies intend to buy this year.

The estimate is slightly lower than the earlier projection of 206.8 million kg, representing 0.68 percent difference.

Last year, the country sold 202 million kg of tobacco, realising $330 million.

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