Tobacco farmers were all smiles yesterday at opening day prices for the 2022 Tobacco Marketing Season and asked President Lazarus Chakwera to ensure the good prices offered on the first day persist.

During their interaction with the President at Lilongwe Auction Floors, the growers said the market started on a positive note and urged Chakwera to engage buyers to pay more for the leaf.

They also told the President that  buyers tend to offer better prices  on the opening day but reduce them once the President leaves the premises.

In his response, Chakwera assured the farmers that his administration will intervene, but asked them to grade their leaf properly so that buyers have no excuse for reducing prices.

Speaking in an in an interview, Tama Farmers Trust chief executive officer Nixon Lita said the market has started early with good prices offered, but there was fear of high rejection rate, especially on the auction market due to moisture content as the rain season is still on.

During yesterday’s sales, flue cured tobacco fetched $2.85 (about K2 337) per kilogramme (kg) as the highest price while burley raked in $2.30 (about K1 886) per kg as highest price on the contract market.

On the auction market, the highest price offer for flue-cured tobacco was $1.75 (about K1 435) per kg while the minimum price was $0.95 (about K779) per kg on both markets.

Last year, the highest tobacco price on the auction floors was $1.50 while the lowest was $0.90. On the contract side, the highest price was $2.40 per kg.

In his remarks during the opening ceremony, the President said while the green gold faces an anti-smoking lobby with serious regulatory compliance requirements globally, Malawi will continue to produce the crop.

He, however, urged growers and stakeholders to adhere to compliance issues.

Chakwera said: “This year, compliance in the quantity and quality of tobacco production has been further threatened by the late onset of rains and heavy downpours.

“But these challenges notwithstanding, the compliance demands of the global market must be met, and so opening the market earlier makes sense to allow those growers who are ready to bring their compliant tobacco to the floors to do so.”

He said this year’s official opening of the Tobacco Marketing Season had come two and a half weeks earlier than that of the 2021 season to cushion growers against the financial challenges they are facing during this transitional period when compliance with standards becomes difficult.

Minister of Agriculture Lobin Lowe said the 2022 tobacco growing season has been characterised by late onset of rains and devastating storms in the name of cyclones which have had a negative impact on this year’s tobacco production.

On his part, Tobacco Commission acting board chairperson Lowly Mbulo hailed the government for the recent withholding tax reduction from three to one percent which will help farmers to manage their cash flow before their tax returns.

AHL Group plc board member Jolly Nkhonjera said they are ready to run this year’s tobacco markets and provide excellent service to farmers and all stakeholders while adhering to Covid-19 preventive measures.

With low production against demand, he said it is their hope that tobacco farmers would fetch better prices this season and reap from their sweat.

Projected production volumes, according to the first round of crop estimates survey, is 103 million kg of tobacco against buyer volume demand of 140 million kg.

In the 2021 marketing season, cumulatively the country earned $197.1 million (about K160 billion) from tobacco sales, which is lower than $250 million that the country requires for its monthly import cover.

During the same year, the country sold 123.7 million kg of tobacco with the seasonal average price of all tobacco types at $1.59 (about K1 295) per kg, compared to $1.53 (about K1 247) per kg recorded during the same period in 2020.

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