Malawi’s tobacco sector is facing renewed pressure ahead of the 2025/26 marketing season, as declining demand and fewer buyers raise concerns over lower prices, farmer incomes and foreign exchange earnings.
Preliminary industry data show that tobacco buyers plan to purchase about 170 million kilogrammes this season, down 25 percent from the 213 million kilogrammes bought last year. At the same time, the number of licensed buying companies has fallen to eight, from 11 in the previous season.
Industry experts warn that reduced competition among buyers could depress prices, leaving farmers exposed to income losses in a sector that remains central to Malawi’s economy.
Tobacco is Malawi’s single largest foreign exchange earner. In the 2024/25 season, the country sold 221.2 million kilogrammes, generating US$542.3 million in export revenue. Any sustained drop in demand could therefore weigh heavily on both rural livelihoods and national finances.
Concerns have been compounded by the scale of licensed production. The Tobacco Commission has authorised farmers to produce 242.5 million kilogrammes in the 2025/26 season—far above the volume buyers currently intend to purchase. Analysts say the potential oversupply could push prices lower if additional buyers do not enter the market.
“When supply significantly exceeds demand, prices inevitably come under pressure,” industry observers say, warning that weak prices can also encourage smuggling and other informal trading, eroding government revenue.
Farmer groups, including the Tama Farmers Trust, have urged stricter production controls through licensing to better align output with market demand. They argue that last season’s prolonged selling period was a direct result of oversupply.
Historical data highlight the recurring mismatch between licensed volumes, actual production and buyer demand. In the 2024/25 season, 174.4 million kilogrammes were licensed, but farmers produced about 221 million kilogrammes, while demand stood at 213 million kilogrammes. In contrast, during the 2023/24 season, 265.9 million kilogrammes were licensed, but output fell to 133 million kilogrammes, against demand of 190 million kilogrammes.
The repeated imbalance has made price stability difficult, directly affecting farmer earnings and export receipts.
Unless additional buyers emerge or production is curtailed, analysts warn that tobacco farmers could face another season of weak prices, putting further strain on Malawi’s top export sector and the broader economy.
