Tobacco sales resume after suspension

Malawi resumed sales of tobacco on Thursday after a brief suspension sparked by growers' complaints of poor prices. Godfrey Chapola, general manager of the country's Tobacco Control Commission, told IRIN: "Growers were not satisfied with the prices offered so we closed sales so that we could talk to the buyers and the growers about the matter." The sales floors in Lilongwe were closed on Monday and Mzuzu in the north and Limbe in the south had followed suit by Wednesday. Tobacco accounts for up to 74 percent of the landlocked country's foreign currency earnings, and 65 percent of tobacco growers are small farmers. Harvest time in Malawi - whether for food or tobacco - and the cash that this brings in, is usually when families make their large cash purchases and pay off debts from the previous year. This crisis comes as the country braces itself for widespread food shortages that are expected to touch about 3.2 million people. Alex Kavinya of the Tobacco Growers Association said their main concern had been that the prices offered did not cover costs and did not provide money to pay for inputs for next year's crops. "From last week the prices started nose-diving quickly. As growers, we wanted to go back to buyers to find out why the prices were declining," Kavinya said. "As usual they had different types of stories and said they can't avoid it. We are concerned because our profit margin isn't there," he said. Kavinya said the most common reason given was that buyers already had enough stock. Buyers include heavyweights Philip Morris, Universal and Virginia who seek out Malawi's air-cured burley tobacco. Farmers' anxieties are compounded by their loan commitments at interest rates of over 50 percent. The Malawi government has abolished agricultural subsidies which means farmers must meet the entire cost of the crop. Kavinya said Thursday's prices were slightly better but growers were still not happy. "Even though the prices have changed a little they are thinking in terms of buying their inputs." This is the second time the crop auctions have closed this year. In April farmers rioted in Lilongwe when they saw that prices had tumbled from US $1.80 to US $0.60. In Zimbabwe the government resolved a similar crisis earlier this year by announcing that growers would be paid a subsidy upon the sale of their tobacco.