“This year we have very good rains and with good care of the crop, we are sure of getting more revenue,” Mutharika said on MBC Radio during a live broadcast of the opening ceremony in the capital, Lilongwe. “The buyers should realize that farmers can only continue growing tobacco if they are paid prices beyond the cost of production,” said Mutharika.
Tobacco earnings fell 5 percent to $410.6 million in the year through Nov. 19 because of a drop in sales, the Bank of Malawi said Dec. 8. Prices averaged $1.90 per kilogram(2.2 pounds), higher than the $1.88 received in 2009, with prices declining in the second half of the season because of delayed confirmation from the buying companies’ customers and increased production in Zimbabwe.
Minimum prices for burley have been set at $1.80 per kilogram, down from $2 a kilogram set last year, Daily Times reported yesterday, citing Tobacco Control Commission Chief Executive Officer Bruce Munthali. The price reduction follows a drop in demand for the leaves by buyers, Munthali told the Blantyre-based newspaper. Malawi began setting minimum prices for the various grades of tobacco in 2007, after accusing merchants of putting growers out of business by offering them lower prices.
Tobacco is Malawi’s biggest foreign-exchange earner, accounting for 60 percent of all revenue earned from abroad.
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