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Mr Gwanda Chakuamba (2003)

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Wednesday, August 06, 2008

Malawi's tobacco earnings jump 88 pct this year

LILONGWE (Reuters) - Malawi expects revenues from tobacco, its main
foreign exchange earner, to rise 88 percent this year to about $348
million from $185 million last year, officials said on Wednesday.

Tobacco accounts for over 70 percent of exports and 15 percent of
its gross domestic product (GDP) in this poverty-stricken southern
African country.

A total of 143,000 metric tonnes of tobacco was auctioned by
end-July pushing tobacco revenues higher, against total volume of
150,000 tonnes exported in the previous year, the Tobacco Control
Commission (TCC) said.

Higher prices on the auction market in the last two years have
encouraged tobacco production, and pushed production from 140,000
tonnes in 2006 to 150,000 tonnes in 2007.

The tobacco regulatory authority projects a steady 150,000 tonnes of output for 2008.

The biggest auction floors saw farmers sell their crop at an
average of $2 per kg after Malawi's President Bingu wa Mutharika
ordered buyers to offer better prices or leave the country.

For many years tobacco prices had hovered around 70-90 U.S. cents
per kg, far lower than the $1 that it costs to produce one kg of the
golden leaf, farmers say.

The country's auction market will close early next month.

About 2 million of the country's 13 million people depend on tobacco and related industries for their livelihood.

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