Tobacco Demand Drops, Raising Concerns for Farmers and the Economy

 

Malawi’s tobacco industry is facing a tough season. Preliminary reports show that buyers want to purchase only 170 million kilograms of tobacco in the 2025/26 season. This is 25 percent less than last year, when buyers bought 213 million kilograms.

The number of companies buying tobacco is also falling—from 11 last year to 8 this year. Experts warn that fewer buyers could push prices down, which would hurt farmers’ incomes.

Why this matters: Tobacco is one of Malawi’s biggest sources of money. Last year, the country sold 221.2 million kilograms, earning $542.3 million (about K950 billion). If demand drops but farmers still produce a lot, prices could fall, meaning less money for farmers and the country.

The Tobacco Commission (TC) has licensed farmers to produce 242.5 million kilograms—much higher than the 170 million kilograms buyers currently want. This oversupply could worsen the situation if more buyers do not enter the market.

Experts warn that when prices fall, it can lead to problems like smuggling, which further hurts farmers and government revenue. Some farmers and industry groups, like Tama Farmers Trust, say that controlling production through licensing is important to avoid oversupply and long selling seasons, which happened last year.

Past trends show that licensed production often does not match actual output or buyers’ demand. For example:

• In 2024/25, 174.4 million kg was licensed, but 221 million kg was produced. Demand was 213 million kg.
• In 2023/24, 265.9 million kg was licensed, but only 133 million kg was produced. Demand was 190 million kg.

This pattern shows the difficulty of balancing supply and demand, which directly affects tobacco prices, farmers’ incomes, and Malawi’s economy.

In short, farmers may face lower prices this season unless more buyers come into the market, and the country’s earnings from its top export could be under pressure.

 

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