Tobacco growers in Malawi forced government to suspend sales of the leaf on Tuesday after a row over prices, a day after President Bingu wa Mutharika set higher minimum tobacco prices for this year's auction season."The sales have been suspended temporarily until buyers, growers and
government reach an agreement," Tim Kachitosi, spokesman for the
auction market Auction Holdings Limited said.
Mutharika, Monday opened the 2009 tobacco marketing season with minimum
prices for burley fixed at 2.15 US dollars and flue cured leaf at 3.09
US dollars per kilogramme.
Mutharika has since 2006 been setting minimum prices for all types of
tobacco, a development that has seen smallholder producers of the leaf
earning handsomely from tobacco sales.
The president said tobacco was a strategic crop for Malawi and
therefore stressed the need for ensuring that smallholder farmers were
rewarded accordingly from the sale of the crop.
Tobacco is Malawi's most important crop as it fetches about 70 percent
of the country's total foreign exchange every year. It contributes 30
per cent of the country's Gross Domestic Product (GDP), 25 per cent of
the country's tax earnings and over 70 per cent of Malawians are
directly or indirectly employed by the tobacco industry.
Last year tobacco earned Malawi about 472 million US dollars, the
highest revenue the country has realised from the crop in years.
Deputy Minister for Agriculture, Frank Mwenefumbo, said production of
tobacco had this year gone up by about 18 percent mainly due to the
provision of subsidized fertilizer to over 200,000 smallholder farmers.
Malawi's 2009 overall tobacco production has been estimated at about
250 million kilogrammes compared to last year's 194 million kilogrammes.
Reuters/Mana
Post published in: Economy