Above half tobacco sold, revenue remains low

More than half of the projected tobacco crop has been sold three months after the marketing season opened, but earnings remain 36.7 percent below the corresponding period last year due to lower prices.

According to weekly market reports from the Tobacco Commission (TC) and AHL Tobacco Sales Limited, 99 million kilogrammes (kg) of tobacco have been sold over the past 12 weeks, generating $202 million (K353 billion) at an average price of $2.04 (K3 572) per kg.

This means more than half of the projected 197 million kg crop has already been marketed. However, the figures are well below those recorded during the same period last year, when 126 million kg were sold for $319 million (K558 billion) at an average price of $2.52 (K4 412) per kg.

According to the TC report, tobacco uptake continues to favour the contract market, which has an uptake rate of 97.2 percent, compared to just 41.3 percent for auction tobacco, resulting in an overall uptake of 92.6 percent.

This means the rejection rate for auction tobacco remains high at 58.7 percent, a situation TC spokesperson Telephorus Chigwenembe acknowledged, saying the commission continues to engage buyers on the matter.

“The overall tobacco uptake is impressive, although that of auction tobacco remains less impressive than contract tobacco. We continue engaging buyers on the performance of auction tobacco uptake,” Chigwenembe said.

In a separate interview, Tama Farmers Trust president Abiel Kalima Banda described the market’s performance as worrying, saying both uptake and prices remain low even as the marketing season approaches its final stages.

Kalima Banda, who believes actual production will fall below the initial projection of 197 million kg because most of the crop has already been sold, said it is concerning that prices continue to decline instead of rising as they normally do towards the end of the season.

Kalima Banda said: “Our farmers do not have much tobacco remaining. We are certain production will be well below the initial projection. We are already approaching the closing stages, so prices should have been rising.

“The most worrying thing is that we were made to believe low prices were a result of overproduction. But it now appears we either produced in line with demand or even below it. Farmers therefore feel they have been duped.”

Meanwhile, Chigwenembe had not commented by press time on claims that actual production will fall below the 197 million kg projected in the TC’s second-round production estimate survey.

When the marketing season opened on April 20, 2026, the average price stood at $2.17 (K3 799) per kg. It has since fallen by six percent to $2.04 (K3 572) per kg.

Earlier, the commission warned that excess production both locally and internationally could depress prices and urged farmers to improve the quality and grading of their tobacco.

The TC’s second-round production estimate survey projected tobacco output at 197 million kg, about 14 percent above buyers’ demand of 170 million kg.

The number of buyers has also fallen from 11 last season to eight this year, raising further concerns about pressure on demand.

This year’s buyers are JTI Leaf (Malawi) Limited, Alliance One Malawi, Limbe Leaf Tobacco, Hail and Cotton (Malawi), Premium Tobacco, Associated Central African, African Tobacco Services and Nyasa Manufacturing.

Last season, farmers produced 221 million kg of tobacco against licensed volumes of 174.4 million kg and demand of 213 million kg.

The crop generated a record $542 million (about K949 billion) at an average price of $2.46 (about K4 307) per kg.

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