Malawi government commits tobacco buyers on prices

Government has signed a  price agreement with tobacco buyers, committing them to buy the leaf not below the agreed prices when the tobacco marketing season starts.

The Grade Minimum Prices commits the buyers not to offer tobacco growers anything below the agreed prices.

The government is also expected to announce the minimum price for buying tobacco this year.

Agriculture Minister Lobin Lowe said the sharp drop in tobacco output from 2010, where the country produced 400 Kgs to now where farmers have produced 122 Kgs, clearly shows that the farmers have been frustrated over the years by poor pricing.

Lowe says government expects improved prices this year because the output is far below the anticipated quantity by international buyers.

Tobacco Processors Association President Hugh Saunders says it is important for Malawi to manage expectation as the country prepares for the opening of the market.

He said the impact that covid-19 has had on cigarette sells has been enormous.

Saunders urged Tobacco Commission to question the international demand for tobacco, saying things are tough in the industry and that the E-cigarettes are also taking away some market from tobacco.

International tobacco buyers this year are looking for 132 million Killogrammes (Kgs) but first round tobacco estimates indicate that Malawi will produce 122 million Kgs.

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