Tobacco to remain Malawi’s hub—Mutharika tells buyers to offer good prices

President Peter Mutharika on Wednesday officially opened this year’s  tobacco marketing season at Kanengo Auction Floors in Lilongwe with a call from tobacco buyers to offer good prices for the green gold and  reiterated that tobacco will remain Malawi’s main foreign exchange earner despite the ongoing global anti- smoking lobby.

Mutharika said he will not stand aloof and watch his farmers being exploited, pointing out that tobacco is a crop of national strategic importance for the role it plays in the national economy.

“My government will continue to engage with our customers overseas to ensure that our tobacco farmers are protected. We are engaging different companies to explore and widen the tobacco exports to the US and other destinations globally,” said Mutharika.

The opening of the season comes at a time the country is bound to yield lower than expected volume of tobacco on the backdrop of ravaging floods that damaged and washed away crops, including Malawi’s major foreign exchange earner, tobacco.

Tobacco Control Commission (TCC)is projecting that the country will yield 181.6 million kilogrammes (kg) of all tobacco varieties, namely burley, flue-cured and dark-fired.

Mutharika said the importance of tobacco to the Malawi economy cannot be over-emphasized since it is contributing greatly to the country’s foreign exchange earnings.

“My Government is therefore promoting tobacco production and marketing as a crop of strategic importance so that our farmers in the rural areas are economically empowered,” said Mutharika.

The Malawi leader said his sovernment is also determined to promoting value addition to increase export earnings from tobacco through manufacturing of cigarettes, pipe tobacco snuff, cigars and cigarillos.

Mutharika said he is aware that aware that the tobacco industry is facing a lot of challenges and key among them is the issue of the anti-smoking lobby spearheaded by the World Health Organisation Framework Convention in Tobacco Control in order to safeguard human health.

“This has had and will continue to have negative effects on demand for tobacco world-wide and may therefore seriously affect Malawi’s foreign exchange earnings and the livelihoods of our tobacco farmers.”

On the future of tobacco in Malawi, Mutharika said  Malawian growers should expect bright future  in tobacco growing and marketing followings series of meetings which the president has been having with the international customers.

“I have had meetings with some of our tobacco merchants as well as international customers in order to strengthen our relationships with them but also to find ways of adding value to the tobacco they buy from us.  As I am speaking, a number of foreign companies including our traditional tobacco customers have shown interest to invest in tobacco cigarette manufacturing and other secondary tobacco products,” said Mutharika.

Mutharika said “We are all aware that Malawi cannot stop growing tobacco overnight  we will continue growing tobacco based on trade requirements until when there is no demand.”

TCC chief executive officer Bruce Munthali said the organisation has licensed three new tobacco buyers, including Chinese firm Sino-Ma, which will also set up a cigarette processing factory in the country.

“We have licensed three new buyers this year and one of them a Chinese company named Sino-Ma, which is ready to spend around $30 million (about K13 billion) to purchase tobacco and set up a plant for processing secondary tobacco products like smokeless cigarettes,” he said.

Last year, Malawi earned $362 million from 168 million kg of tobacco at auction floors level, a similar value it earned in 2013.

In 2012, the country realised $177 million, which was lower than the $292 million revenue it earned in 2011.

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