Agriculture Minister Lobin Lowe signed Grade Minimum Price agreements with 9 tobacco-buying companies, as the terms stipulated that the buying companies should  not offer prices below the minimum set prices.

The Minister emphasized that the law of supply states that when the quantity supplied is lower than the demand, the price should go up as there will be a scramble for the commodity.  “We, therefore, expect no excuses for lower tobacco prices this time around,” Lowe said to representatives of the companies.

However, the Minister did not indicate the minimum prices that the government has agreed with the buyers, as the minimum price should be gazetted first before being made public.

In 2010, Malawi produced around 400 million kilogrammes (kg) of the green gold but the production has been plummeting over the years and is expected to hit 122 million kg this year.