By Mphatso Sam
Tobacco rejection sales rate has dropped to 25 per cent since the opening of the 2019 tobacco marketing season in April, Tobacco Commission (TC) Corporate Planning and Development Manager Hellings Nasoni has said.
In an interview on Thursday with Malawi News Agency (Mana), he said there has been a big reduction in the tobacco rejection rate, from 48 to 50 per cent at the start of the market, to 20 to 25 per cent in this 17th week of the market.
Nasoni attributed this to the an initiative undertaken by the Commission in engaging growers to include crops which are dry enough to the standard level as well as to avoid mixing the tobacco grades.
“When we were opening the market, the quality of the leaf was not to the expected level, there were high levels of moisture content beyond the standard required levels. As such the buyers were not willing to buy the crop.
“There was also mixture of grading; farmers could put two grades in one bale that made the buyers not to be confident enough to say the price. This compromised buyer’s independence in terms of the competitive price they had to provide in respect to the quality of the leaf.” he said.
Nasoni highlighted stiff competition as one of the factors that contributed to the high rejection rate that was recorded at the start of market.
“We normally start with the tobacco from the bottom leaf and finish with tobacco from the top leaf. The bottom leaf tobacco is usually low quality compared to the top leaf and the top leaf is the one fetching higher price,” the Manager added.
Tobacco Association of Malawi (TAMA) is optimistic that the over quota restriction will be removed with the drop in rejection rate.
“That is good for the farmers because more tobacco will now be going to the market and that will assist in creating space at the AHL. But though the rejection rate might reduce, the prices will still remain the same.
“Most of the growers have finished sending their normal tobacco but they are having some tobacco that they have to sell but they cannot because of the restrictions. We are asking TC to assist these farmers by uplifting the quota,” TAMA Chief Executive Officer, Felix Thole said.
According to TC third round estimates, the commission intends to sell 193.5 million kilogrammes but as of August 16, 138.6 million kilogrammes were sold realizing US$204.3 billion.
The market may close at the end of September, according to Nasoni.