Malawi's tobacco production in 2007 year is expected to drop to 141,000 tonnes from 158,000 tonnes last year because of too much rain, the Tobacco Control Commission (TCC) has said. "We expect a drop of 10.14 per cent this year because of heavy rains experienced in most tobacco growing areas," TCC said in a statement. This year's forecast production is far below the 170,000 tonnes Malawi produced in 2004.
Tobacco accounts for over 70 per cent of Malawi's exports and 15 per cent of its gross domestic product, but for the last two years low international prices have led to cuts in production. Official TCC figures indicate that about 40,000 Malawian farmers left the industry in the between the year 2000 and 2006 due to low prices.
But TCC general manager Godfrey Chapola said prices may improve this year due to falling production and the government's registration of an additional US-based tobacco buyer. "With production levels as low as they are and the registering of Premiere Leaf as another buyer, we anticipate to have impressive prices as we expect stiff competition amongst buyers," Chapola said.
Limbe Leaf Tobacco, majority owned by the Swiss-registered Continental Tobacco Company, and US-based Alliance One Tobacco, are the active buyers who were last year ordered by President Bingu wa Mutharika to leave the country or offer better prices. Wa Mutharika, himself a tobacco farmer, accused them of running a cartel to fix prices on the market. He imposed a minimum price of 110 US cents per kg and 170 cents for higher grade leaf. But buyers boycotted, raising fears the standoff could hit Malawi's forex earnings.
Daily Nation
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