Malawi's tobacco auction floors resumed sales on Tuesday after tobacco farmers forced a suspension last week in protest against a drop in prices, an auction spokesman said on Tuesday.
Auction Holding Limited spokesman Tim Kachitosi said tobacco farmers were back on the auction floors after reaching an understanding with buyers and other industry stakeholders.
"It was explained to the farmers that some of the tobacco that was on the floors was low grade and therefore did not deserve the prices they demanded," he said.
"Today the quality of tobacco being sold is good and the prices have reflected that ranging between $2 and $3 which is still above the government set minimum price of $2.20."
Malawi opened its tobacco auction season last week with prices at record highs. Farmers sold at between $6 and $11 per kg -- but sales on the market were suspended three days later after prices dropped to as low as 60 cents.
Tobacco accounts for over 70 percent of Malawi's exports and 15 percent of its gross domestic product. For the last two years low prices have led to suspensions of sales and cuts in production.
Tobacco farmer Wilson Chikalimba told Reuters he was happy with the explanation given by the authorities over why the crop fetched low prices on Thursday. "Today I am selling my tobacco because I know I will get around $2 and that is fine with me."
Most tobacco in Malawi is produced by peasant farmers. Over 2 million people in the small southern African nation earn a living from tobacco and other related industries.
Tuesday, 25 March 2008
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