By Chisomo Phiri
President of the United Democratic Front (UDF), Atupele Muluzi, has said that this year’s tobacco marketing season is one of the most difficult in the country’s history, citing oversupply pressures and exchange rate distortions that he says are threatening farmers’ livelihoods.
In an interview with 247 Malawi News,Muluzi said tobacco remains the main source of income for many Malawian farmers, stressing the importance of fairness, transparency, and strong support from all stakeholders during the challenging marketing period.
He noted that the region is facing what is likely the largest oversupply of tobacco in its history, with significant carryover stocks from the previous growing season.
Muluzi warned that market forces alone could drive prices to record lows, placing immense financial pressure on farmers.
“This situation demands urgent and practical solutions to support those who depend on tobacco for their livelihoods,” he said.
He further pointed to exchange rate distortions as a major contributing factor to the crisis.
Muluzi said farmers are being paid at the official exchange rate, which he noted is effectively discounted by up to 30 percent in some cases, while the prices of many essential goods are already aligned with parallel market rates.
He described the situation as deeply unfair and economically damaging, warning that it is worsening the financial strain on rural households.
“There is an urgent need to realign our exchange rate framework. The current situation is simply unsustainable.We need urgent reforms,” said Muluzi.
The 2026 tobacco marketing season opened on Monday at Lilongwe Floors with buyers rejecting a record 90 percent of the leaf, raising concerns over compliance, pricing and the early direction of Malawi’s most vital export market.
Tobacco Commission (TC) officials said the high rejection rate was largely due to farmers not presenting a minimum price card, a key requirement in determining floor prices.
Minister of Agriculture, Irrigation and Water Development Roza Fatch Mbilizi, speaking during the opening of the market, said adherence to market rules is important to ensure fair value for farmers and stability in the sector.
“The performance of this market determines Malawi’s economic trajectory,” she said, describing farmers as heroes whose output remains key to the country’s foreign exchange position.
Mbilizi appealed to buyers to buy all tobacco produced while cautioning against exploiting current supply conditions.
“There is overproduction, but no single leaf should be bought at lower than the market price,” she said.
The 2026 Second Round Tobacco Production Estimates Survey indicated that Malawi is expected to produce 197 million kilogramme (kg) of tobacco, which is 14 percent higher than buyers’ demand of 170 million kg.
Early market signals on Monday pointed to weaker pricing compared to last year.
Data from the floors show that the highest price on contract farming was $3 (about K5 252) per kg with lowest at $1.20 (about K2 101) per kg compared to last year’s opening price of $3.20 (about K5 603) per kg.
On the contrary, the highest price on the auction market was recorded at $2.50 (about K4 377) per kg with the lowest price recorded at $2 (about K3 502) per kg compared to last year’s opening price of $1.80 (about K3 151) per kg.
Last season, tobacco raked in $539.4 million (about K944.66 billion), record earnings in over 10 years.
Tobacco remains Malawi’s main foreign exchange earner and contributes about 60 percent to the country’s foreign exchange earnings and 13 percent to the economy.
