/ 11 September 2009

Malawi expels tobacco buyers for price undercuts

Foreign tobacco buyers who are paying less than agreed-upon prices for tobacco are the ''enemy of the people'', said Malawi's president.

Foreign tobacco buyers who are paying less than agreed-upon prices for the country’s main cash crop are the ”enemy of the people” and will be expelled, said the president of Malawi, whose government this week deported three of them.

President Bingu wa Mutharika’s administration ordered the expulsion of a South African and three British buyers, making good on a campaign promise.

”These individuals connived to deliberately frustrate the policy of this government to improve the welfare of our people through better prices of tobacco,” Mutharika said in a special address to the nation on Wednesday.

”They have been sabotaging the Malawi economy and have been harming the very people who grow tobacco for them to buy.”

When the deportation order came, one of the four officials was already out of the country. The others left on Wednesday without speaking to reporters.

During the campaign for elections he won in May, Mutharika decreed that the minimum price for burley tobacco should be $2,15 a kilogram while flue-cured tobacco should be selling at a minimum of $3,09 a kilogram. Buyers, though, have been paying between 70 United States cents and $1,90, the government alleges.

Mutharika said on the campaign trail that he would ”not hesitate to expel anyone who exploits my people”.

Tobacco fetches more than 75% of Malawi’s foreign exchange earnings. More than 80% of Malawians are directly or indirectly employed by the tobacco industry, which contributes up to 30% of the country’s gross domestic product and at least 23% of all tax collections.

”I am now warning all tobacco buyers that any company that deliberately seeks to cheat the people of Malawi and ignore the agreed prices of tobacco and any similar commodity will be dealt with accordingly,” he said.

”Anyone sabotaging our economy is an enemy of the people of Malawi and does not deserve to be in this country.”

More than 30 000 smallholder farmers produce Malawi’s tobacco.

Malawi is the world’s second largest producer after Brazil of burley tobacco, a thin-leafed brand that is dried in the open air.

Last year, Malawi sold 194-million kilograms of leaf, earning $472-million. This year the country’s overall production of tobacco has been projected at 250-million kilograms. — Sapa-AP