Malawi tobacco prices hit US$1.84per kg: Mutharika warns of cosmetic first day prices, tax evasion

Tobacco prices in Malawi hit US$1.84per kilogram as President Peter Mutharika opened the auction floors on Wednesday giving a ray hope of better prices for the leaf this year.

President Mutharika witness Tobacco Auctioning in Progress at Lilingwe Auction Floors to mark the official opening of 2016 Tobacco Marketing Season (C) Stanley Makuti

President Mutharika witness Tobacco Auctioning in Progress at Lilingwe Auction Floors to mark the official opening of 2016 Tobacco Marketing Season (C) Stanley Makuti

President Arthur Peter Mutharika witness Tobacco Auctioning in Progress at Lilingwe Auction Floors to mark the official opening of 2016 Tobacco Marketing Season (C) Stanley Makuti

President Arthur Peter Mutharika witness Tobacco Auctioning in Progress at Lilingwe Auction Floors to mark the official opening of 2016 Tobacco Marketing Season (C) Stanley Makuti

However, Mutharika warned the buyers against giving cosmetic prices on first days of the masket, saying ordinary poor Malawians need to reap from their year- long sweat.

“We want fair prices. Every year we discuss tobacco prices which you implement on first day and abandon later. This year we asked you to come up with the minimum prices which you did and we hope you will not abandon the prices,” said Mutharika.

Added Mutharika:  “Listen  to us, listen to our cries. You have to listen to the plight of our farmers.”

He said the government will not sit back and watch as the buyers exploited tobacco farmers saying he would be visiting the markets without any warning or announcements to make sure the buyers stuck to their promises of good prices.

The President also reminded the buyers that the government would not tolerate tax evasions and would severely with such companies involved in tax evasions.

He also advised the farmers to offer good leaf for sale if buyers are to offer good prices saying the 34 per cent rejection rate of tobacco means some farmers continued to sell poor leaf or were still placing objects in their bales to cheat tobacco buyers.

Mutharika also said its high time Malawi diversified its cash crops as tobacco is facing huge challenges because of unreliable weather and anti smoking campaigns.

The President said farmers were labouring more and earning less hence the need to tackle the issues with strong regulation of the tobacco industry to reduce the cost of production and the cost of fertilizer.

He said government’s solution was to bring home investors in local fertiliser manufacturing and create more jobs, save the country’s forex and stop importing fertilizer from other countries.

Chairperson for Auction Holdings Limited (AHL) Group, Foster Mulumbe, concurred with Mutharika describing tobacco as the biggest foreign exchange for the country.

He said AHL group was more than prepared to efficiently handle tobacco sales for this year in all its market points.

“We have done all the infrastructure upgrades to ensure a smooth flow of operations and that the industry’s taxes are appropriately channelled to government,” said Mulumbe.

The tobacco prices ranged from 50 cents to US$ 140 to US$ 184 per kilogram bringing smiles on the faces of the farmers although most tobacco has been sold at US$80.

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3 thoughts on “Malawi tobacco prices hit US$1.84per kg: Mutharika warns of cosmetic first day prices, tax evasion”

  1. chiputula says:

    The opening of floors by the president should come to an end .WE are spending our money on useless things.president should stay away from these functions ,has nothing to do with tobacco sales .instead he is the one causing low tobacco prices at the floor because azungu sakumufuna munthuyu

  2. tim says:

    Tobacco companies like Limbe leaf,JTI offer very low prices and then export at usd5.00 to there customers abroad. Also reserve bank are allwoing these greedy tobacco buyers to keep 100% of there export proceeds why, that is fuelling low prices, Reserve bank should change rules local buying companies should change all there kwachas immediately when they export as that way they tobacco buyers will be forced to pay tobacco farmers higher prices. Please reserve bank dont allow these greedy tobacco buyers exploit poor farmers dollars

  3. Charlie Hebdo says:

    Do we really need to have the state president open the tobacco auction floors every year? Will our tobacco not be bought if he stays away from the floors? As a country we spent alot of money on useless things.

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