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Tobacco field in Malawi, March 2022. Credit: TAMA.
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Nixon Lita, c.e.o., Tobacco Association of Malawi (TAMA). Credit: TAMA.
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Provincial tobacco warehouse where produce from surrounding farms is collected before being transported to Lilongwe for auctioning. Credit: TAMA ©2018.
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Local burley curing shed. Credit: TAMA ©2018.
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Dr. Joseph Chidanti-Malunga, c.e.o. of Malawi’s tobacco commission. Credit: Tobacco Commission.
Though experiencing some effects from the coronavirus pandemic, Malawi’s tobacco growing sector managed to pull through the crisis relatively unscathed.
When the first wave of Covid-19 struck the small southeastern African nation of Malawi around February 2020, the country’s all-important tobacco growing sector found itself in the lucky position that the season’s harvest was already in. Cured and graded, it was ready for auctioning. That doesn’t mean that the continuing pandemic didn’t have any effects on the sector at all, though.
As a measure to prevent the virus from spreading, farmers were barred from attending sales auctions in order to decongest trading floors. “Farmers were asked to choose zonal representatives to witness tobacco sales as the number of people allowed to attend on tobacco selling floors was restricted as a preventive measure,” explained Dr. Joseph Chidanti-Malunga, c.e.o. of Malawi’s tobacco commission. Furthermore, the pandemic spawned a new secret bidding system. Previously, all licensed tobacco buyers congregating at an auc-tion could examine the offered produce clumped together in large groups, bidding (and outbidding each other) as they walked along the neatly arranged lines of bales. Under the new system, which will be carried forward into the post-pandemic era, buyers now examine the goods and place their bids only one person at a time, according to Dr. Chidanti-Malunga.
But auction-related adjustments weren’t the only ramifications brought on by the virus crisis. There also happened delays along the domestic tobacco supply chain. “Due to cutbacks on staff and operational hours, it was taking longer for some stages of the supply chain to be completed, for instance tobacco grading,” the commissioner said. Budget overruns proved an issue, too, as pre-ventive measures to contain the virus necessitated unplanned expenditures on personal protection equipment such as facial masks, gloves, and protective suits.
Last but not least, the pandemic caused a reduction in tobacco exports. Malawi is a land-locked nation and for its exports relies on railway lines and roads connecting to commercial ports in neighboring countries such as Mozambique and Tanzania. “As border crossings but also ports shut down, those logistics providers that were operational had to greatly downscale their activities,” the Tobacco Commis-sion c.e.o. told Tobacco Asia. This in turn caused buying companies to be stuck with huge tobacco stocks, both committed and non-committed. “Consequently, it seriously reduced their available storage capacities and, hence, their willingness to competitively purchase more tobacco,” elaborated Dr. Chidanti-Malunga.
Of course, there were plenty of well-orchestrated mitigation measures to assist growers, according to the Tobacco Association of Malawi (TAMA). TAMA is by far the country’s largest privately-operated farmer organization, presently managing 13,562 government-allocated selling licenses representing about 51,000 growers nationwide. For instance, as farmers were not permitted to personally attend auctions, the trust appointed representatives that could follow proceedings in their stead. “We also ensured that growers received services at their home locations instead of having to travel,” said TAMA c.e.o., Nixon Lita. “That involved, among other assistance, the provision of agronomic inputs up to packaging.” In addition, the trust also worked on improving green leaf movements (i.e. baled tobacco) from farm gate to selling floor, saving cost for the growers. A campaign to sensitize farmers to desist from employing child labor was conducted by the trust, too. “There were fears that some farmers might use children to compensate for labor shortages as a result of Covid-19,” Lita said.
Nevertheless, a quick glance at official total annual production volumes provided by the Tobacco Commission reveals a pronounced slump between the figure for 2019 (about 165,670 tons) and that of 2020, which reached only around 114,000 tons. But Nixon Lita insisted this had nothing to do with the virus pandemic per se. The phenomenon, he explained, was largely due to effects of the World Health Organization’s Framework Convention on Tobacco Control (FCTC). “As [local] production costs have been going up due to compliance with the FCTC’s production regulations, market prices for tobacco remained very low,” he said. As a result, this not only caused merchants to contract less volume but also forced many farmers to diversify crops in an effort to make ends meet. “As a farmers’ body we realize the pressures against tobacco especially from the FCTC, so we have been recommending crop diversification to our members,” Lita said.
However, he also admitted that the organization has “yet to identify alternative crops that fulfill the same level of economic benefits that tobacco brings.” Nevertheless, by 2021 Malawi’s tobacco production already recovered to almost 124,000 tons. But, a preliminary crop survey for the current season, which opened on March 31, suggests that total volume will experience a slump again, estimated to reach around 103,000 tons. “This is because of a dry spell in December 2021 when crops had just been transplanted, but also the impact of tropical cyclones Gombe and Ana in the first quarter of 2022,” Lita pointed out.
Compared to some other producer countries around the world, Covid-19 compromised Malawi’s tobacco growing business less severely. Yet the pandemic also offered a number of valuable lessons for the future. One of them is the realization that it is no longer imperative for local growers to travel long distances to physically participate in the auctioning of their bales. According to Nixon Lita, auctioneers already began working on e-marketing solutions and it should be only a matter of time before the first system is up and running. Banking and payment procedures apparently took a cue from the pandemic, too. “In Malawi, all after-sales proceeds go to the bank account of the respective grower, and during the pandemic banks have made the long-overdue move to improving their communication and payment systems,” he asserted. Another area in which the pandemic highlighted the need for im-provement is operational efficiency along the domestic value chain.
With Covid-19 on the way of slowly tapering out, Malawi’s future as a major tobacco producer (particularly burley, which accounts for around 85% of the country’s output) appears safe. According to Dr. Chidanti-Malunga, global annual demand for Malawi tobacco is approximately 150,000 tons. So, with the present season’s output figure being projected to be only about 103,000 tons, there is ample space for cranking up production and catching up to pre-Covid levels. “The number of buying companies recently licensed by the Tobacco Commission and those who have expressed interest [in obtaining such a license] is indicative of rising demand and profound confirmation that [foreign] markets are growing. The future for Malawi’s tobacco is very bright,” he concluded.