Tobacco could fetch better prices this year as the market opens on April 9 due to a 0.85 drop in the expected harvest from the 2017– 2018 growing season.
The second estimates indicate that Malawi will record a slight drop in the production of around 147.8 million kilograms against the initial estimates of 149 million kilograms, which has been attributed to dry spells and heavy downpours experienced in this year’s growing calendar.
Tobacco Control Commission (TCC) Chief Executive Officer (CEO) Kayisi Sadala revealed this Monday in Lilongwe as he announced the opening of this year’s tobacco market.
“During the first estimates, the challenge we faced was the prolonged drought which affected the crop, especially in the Southern Region.
“But later as the rains resumed, the downpour was even too much for the comfort of the crop especially in the Central and Southern regions,” said Sadala while addressing members of Media Network on Tobacco.
The CEO, however, said those were just estimates, saying the final figures would probably be known as the commodity starts trading.
The Lilongwe Auction Floors will be first to open on April 9 while Limbe opens for business on April 16 and delivery of tobacco to both markets was expected to have started on Monday, March 26.
Chinkhoma Auction Floors will open on April 11 with delivery commencing on April 4, while Mzuzu will open slightly later on April 23 with delivery expected to start on April 9.
Sadala said the drop in production could affect the anticipated revenue as TCC had expected to reach the equilibrium of 171 million kilograms.
This he said could be addressed by encouraging farmers to grow more tobacco next growing season.
Last season, the country under produced the crop by 45 per cent and the market never experienced any break as buyers scrambled for the commodity unlike in 2016 when there was over supply of the crop onto the market.
With the 2018 market demand of 171 million, this means there is a 14 per cent drop in meeting the demand on the market.
Sadala was however optimistic that the undersupply could after all have its brighter side.
“Going by simple economics of demand and supply; our expectation is that our farmers will be able to get good prices since demand for the commodity is now high and the supply is low,” said Sadala.Follow and Subscribe Nyasa TV :