Tobacco: Limbe Auction Floors closes five months earlier than last year
Limbe Auction Floors in Malawi's commercial city, Blantyre, officially wound up its business last Thursday, four months ahead of last year's closing month of November.
Last year, the market closed late because of regular disruptions caused by disagreements between buyers and growers over tobacco prices.
In an interview on Sunday, TCC chief executive officer Bruce Munthali attributed the early closure of the Limbe floors to the general stability in terms of tobacco market this year.
"As you know, the market has moved fast this year because we have had no disruptions. This is compared to last year when the [Limbe] market closed around November," he said.
Munthali also hinted that tobacco sales at the country's main auction floors in Lilongwe are scheduled to close on July 20 and that Mzuzu floors is expected to wind up business on July 22.
He said the early closure of tobacco business this year is due to reduced crop size, which is lower than last year's crop.
This year's low production of tobacco is largely blamed on price disincentives which farmers experienced last year.
The first round tobacco estimates put output this year at 151 million kilogrammes from a record 237 million kg in 2011.
Munthali said final tobacco estimates for this year have been sent to government, through the Ministry of Agriculture and Food Security for approval.
"There has also been stability in terms of the market since there have been no disagreements between government and buyers this year. In addition, buyer competition has also been very stiff," added Munthali.
Commenting on the latest market statistics, the TCC chief said as of July 3 2012, about $163 million (K40.7 billion) had been paid to growers as their proceeds from tobacco compared to $61 million (K15 billion) last year.
Munthali also said during the period, the national weighted average price for the leaf has been $2.16 (K540) per kg compared to 99 cents (K247) per kg in 2011.
He singled out the devaluation of the kwacha in May as one major factor that has helped to stabilise the market as it pushed up growers' income levels in kwacha terms and helped curb smuggling to cross border markets.
Last year, Malawi tobacco at auction floors level was valued at $259 million (K65 billion), down from around $416 million (K104 billion) in 2010.