On Tuesday the second round of tobacco estimate published by the Tobacco Commission (TC) have shown that tobacco production is expected to shrink to 140 million kilograms (kg) this year.
This represents a four percent drop when compared to the 146 million kg projected during the first –found crop estimates last month.
It explains that illuminates a 17 percent increase in production from the 120 million kg sold during the 2022-23 marketing season.
The last report shows the decrease in the projected production from 146 million to 140 million kilogrammes to prolonged dry spells in most parts of the country and poor establishment and performance of some Dark Fire Cured tobacco in the Northern Region.
The statement showed that the first report of nation-wide survey attributed the project improved production to increased hectorage due to good prices offered in 2023, increased number of growers, increased sponsorship and availability of inputs.
Telephorus Chigwenembe Public Relations Officer said the commission is consolidating figures of the current demand for tobacco, which will be announced soon.
Chigwenembe said that the technical guys are still engaging some of the buying companies but they could be looking at the 170 million kg which was years demand as well, but a concrete figure will be provided soon.
This means that at 140 million kg tobacco production, the country is 17 percent shy of the crops demand.
President of Tobacco Association of Malawi (Tama) Farmers Trust, Abiel Kalima –Banda, said the volumes could have been high if not the dry spell.
Banda said they have had a good season, all the supplies were available in good time, especially for farmers under contract. For farmers that planted in November, the crop is well and good but for those who planted in January the crop coincided with the dry spell and most of these fields were not included in the assessment.
He added that they anticipated an increase in the number of farmers interested in tobacco production, which they have witnessed, and they believe, with good prices on the market this year, that number will be maintained and eventually increased to boost production.
Bertha Bangala-Chikadza Acting President of the Economics Association of Malawi (Ecama) said the development will culminate in increased foreign exchange earnings from the crop.
Chikadza added that the increase of 21 percent is huge and they should expect a significant impact in foreign exchange inflow into the country. However, they still need to diversify more in terms of exports to estabilise the foreign exchange reserves.
Greenwood Nyirenda is also economist express skepticism on the figures on account of weather – related eventualities, it could be significant to impact the economy.
Nyirenda, assumed that they have good prices on the market, there will be some significant earnings from the increased volumes of tobacco. However, critical remains the fact that they need to check they appetite for imports because even the impact from this increase in production will not be enough for the imports.
For example they fuel import bill alone cannot be satisfied by proceeds from tobacco and then there is fuel and drugs and other essential imports. They simply need to export more and diversify the economy. Said Nyirenda.
During the 2023 tobacco marketing season, Malawi earned $282.62 million after selling 120 million kg of tobacco at an average price of $2.35.
Tobacco is Malawi’s main export crop. This year’s tobacco selling season is expected to commence on April 10 2024 stating with Chinkhoma market in Kasungu District.
Currently, Malawi is grappling with foreign exachange supply seen at 0.5 months of import cover in February.
