Malawi suspends tobacco sales over falling prices

Malawi suspended a three-days-old tobacco auction on Thursday after farmers withdrew their crop in protest against a drop in prices, a senior official said.

Malawi opened its tobacco auction season on Monday with prices at record highs. Farmers sold their crop at between $6 and $11 per kg -- much higher than the minimum $2.20 set by the government last month.

Auctions were suspended on Thursday after the price dropped to $4 per kg, Tobacco Control Commission general manager Godfrey Chapola told Reuters.

"We have suspended the market until next week after we resolve the issue of prices between the growers and the buyers," he said.

Tobacco accounts for over 70 percent of Malawi's exports and 15 percent of its gross domestic product, but for the last two years low prices have led to several suspensions of sales and cuts in production.

"We don't want to sell our crop at such low prices because this is the same grade which sold between $6 and $11 three days ago," Wilson Chikalimba, a tobacco farmer in rural Lilongwe, said on Thursday.

Tobacco buyers could not be reached for comment.