Mining & Trade News

The Malawi Government is encouraging investors to invest in growing of crops for biofuel production as the country is slugging behind in integration of biofuels into its energy systems despite international forecast on the energy source looking exquisite for the next 20 ears.
Ministry of Energy Spokesperson Upile Kamoto told Agribusiness Review that Malawi’s biofuel industry is mainly dominated by Ethanol Company of Malawi (Ethco) in Nkhota-kota and Presscane in Chikhwawa. The two companies utilize molasses, a bye product in sugar production to produce approximately 20 million litres of ethanol annually.
Kamoto said: “The two companies produce three grades of ethanol namely fuel ethanol, extra neutral alcohol and rectified alcohol, it is exported and also used locally for blending with petroleum products.”
“The country also produces biodiesel from Jathropha but on a small scale. Toleza farm in Balaka district initiated a Jathropha farming program in 2012 with the aim of producing biodiesel to fuel their farm equipment such as tractors.”
According to Malawi’s National Energy Policy 2018 (NEP 2018), biodiesel constitutes only 4% of transport energy which is mainly blended with petroleum fuels at 20:80 for petrol and 9:91 for diesel.
Kamoto said: “Production of bioethanol and other biofuels is one of the policy priority areas in the NEP 2018. Under this priority area, the government intends to support, encourage and promote the production of bioethanol and biodiesel for blending or standalone use in vehicles as well as cooking and lighting.”
“The government intends to do this by increasing the supply of biodiesel and bioethanol, promotion of fiscal incentives for bioethanol and biodiesel production as well as implementing socially and environmentally responsive large-scale bioethanol and biodiesel projects.”
Kamoto said with the Malawi Government promoting private sector participation in the biofuels industry, a number of investors are already showing interest in becoming players in this industry.
“Engagements with them are currently underway and government is providing necessary support and policy direction,” she said.
She explained that government is supporting, encouraging and promoting the production of bioethanol and biodiesel for blending or stand-alone use in vehicles, as well as for domestic use such as cooking and lighting.
“The Malawi government has the NEP 2018 as well as the Malawi Renewable Energy Strategy that promote the production and use of biofuels such as ethanol. Currently, the policy has made it mandatory for bio-ethanol and bio-diesel to be blended with petroleum fuels,” she said.
Kamoto also said the Ministry is, among other things, promoting production of bio-fuels through appropriate pricing incentives, and recently the Malawi Energy Regulatory Authority (MERA) facilitated a review of the ethanol pricing framework for biofuels.
“Previously, ethanol pricing was pegged to the price of petrol despite different cost structures. Currently, with fuel ethanol pricing in place, the industry is assured of fully recovering all production costs, overheads and distribution costs,” she said.
Kamoto further said government intends to promote the biofuel industry by researching into use of Ethanol Driven Vehicles (EDVs), promoting awareness campaigns on the uptake of new technologies such EDVs and also promoting importation of conversion kits for existing petrol-powered vehicles.
PressCane, an ethanol distillery company which is a subsidiary of the conglomerate Press Corporation Limited began its operations in June 2004. Its plant is located in Chikhwawa about 30 km north of Nchalo (55km south of Blantyre) and employs 118 Malawians including management.
The company’s Chief Operations Officer Bryson Mkhomaanthu explained that Malawi could do better to promote local production of biofuels as the industry is growing at a slow pace due to lack of feed stock- molasses as a case of PressCane Limited.
Mkhomaanthu said; “Current demand of fuel ethanol is over 40 million litres per annum while we produce 18 million litres per annum leaving a great deficit to cover.”
He, therefore, disclosed that the company has initiated expansion plans whereby it is to invest in sugarcane production to cushion feed stock shortage as it only relies on molasses obtained from sugar processing firms.
“We would like to start producing own sugarcane in the next three years and we are to increase production from 18 million litres to 27 million litres per year in three years
Mkhomaanthu also said there is need to promote sugarcane production through smallholder farmers and reviewing of tax measures to assist manufacturers improve on the profit margin from biofuel sales.
The main products of PressCane are fuel ethanol also known as anhydrous alcohol (AA 99.5% v/v) and industrial alcohol (rectified spirit 95.0 – 97.0% v/v). Sugar cane molasses are procured from Illovo in Nchalo and fermented into ethanol. The high quality of the ethanol is enhanced by the new molecular sieve dehydration (MSDH) technology installed in the distillery. In 2014, EthCo and Presscane initiated the project dubbed Raw Materials (RAMA). In their drive to increase ethanol production, the companies engaged smallholder sugarcane farmers to grow sugarcane with the aim of increasing the production of molasses.
Increased molasses production would ultimately mean increased feedstock for ethanol production thereby enabling the companies to operate their factories at full capacity. However, the long term plan is to use the sugarcane as feedstock for ethanol production, on top of the molasses from the sugarcane factories.
Global statistics indicate that Biofuels Market is expected to grow at a rate of not less than 8% during 2020-2025 propelled by the increased demand for secure, sustainable, and clean energy supply across the globe.
On account of higher mandates for biofuel blending in automotive fuels and increasing governments’ support for eco-friendly alternatives, the global consumption of biofuel is expected to further grow at a significant level during the forecast period.
The growing environmental need is to draw upon cleaner, renewable, sustainable energy sources to meet the ever-increasing demand for fuel.
Biofuels thus ethanol and biodiesel represent the majority share of renewables in global energy demand for road transport. Demand for bioenergy in the transportation sector is driven by blending mandates in significant economies and by sustained fuel use around the world.
From the 1980s, Malawi has been producing sugarcane ethanol and blending it at proportions of 10-25% with gasoline, in response to the 1970s energy crises and the higher costs of importing refined oil products into the landlocked country.

Despite ongoing efforts by the government to diversify into other potential sectors such as mining and tourism as major sources of foreign exchange, the Tobacco Commission (TC) says the future of tobacco, which is Malawi’s green gold, is still bright.
The Commission says there is lack of understanding on the performance of the industry by members of community who think the industry is dying.
TC’s CEO Dr. Joseph Chidanti Malunga told Agribusiness Review in an interview that there is need for a massive awareness campaign to deal with negative public perceptions about Malawi’s tobacco industry specifically on the issues of utilization of child labour and the world wide anti-smoking lobbying.
“There are a lot of things that people do not understand, that is including those who do research in this country because they just look at the tobacco industry without understanding to what extent these issues are affecting it ,” he said.
Malunga clarified that the anti-smoking lobby is not a major problem for Malawi’s tobacco industry as the existing buyers are still there, and more buyers are also entering the industry.
He said Malawi is also successfully fighting child labour in the industry with the country’s tobacco industry demanding child labor and abuse free strategies by farmers.
“The issue that is rocking the tobacco industry now is not anti-smoking lobby as being propagated but the issue is that everyone wants to produce tobacco without violation of human rights,” said Malunga adding currently the TC is working towards establishment of laws that will protect the farmer, buyer and laborer.
The bill that is under formulation is slated to incorporate the respect of human rights, provision of safe water and first aid medical facilities and other essentials right in tobacco farms.
Malunga said when the new legislation is operationalized, TC officials will be authorized to be inspecting the farms to ensure that no child labor is involved, the working environment is safe, and availability of other essentials for successful farming activities.
He said operationalization of such a law will boost the industry as well as bring back the glory it used to have in the past.
“In a nutshell, we want to eliminate all forms of human rights abuse in the tobacco industry,” he said.
Malunga also said there is growing negative perception towards the tobacco market prices with stakeholders speculating that the prices offered at the market are very low.
He, therefore, advised stakeholders to make a thorough analysis of the how the prices are trending by comparing the prices with the farmers’ inputs.
“When talking about the prices, let us all be looking at what the farmer is putting into his or her farming,” he said.
He explained that the input in terms of money and human resource plus quality of the output and the Malawi Kwacha exchange rate determines the deserving market price between the buyer and the seller.
But an agricultural expert Tamani Nkhono suggests that the country needs to go back to how the people used to do tobacco farming in 1980s, as some measures that were restructured were very fundamental.
Nkhono also advised authorities to accept the fact that the tobacco industry is dying in the country and find alternatives while pressing for the sustainability of the industry.
“We need to accept that the industry does not have a bright future in the country because if you look at the current trends, there is a reduction by at least 1% in the smoking rate due to the anti-smoking lobby,” he said.
He said this has affected sales of Malawi’s main tobacco variety, Burley, which is used for cigarette production as the framework convention on the anti-smoking lobby is targeting additives in cigarettes.
Nkhono also advised authorities to take a close look at the quality of the leaf that the country produces and sells to foreign buyers in comparison with the quality produced in other countries.
He said if the country improves on quality of the leaf, it will be attracting more buyers thus beating competition from other producing countries.
“Malawi has to try as much as possible to maintain or increase its market share by coming up with other interventions. We need to protect the economy by controlling who is supposed to be growing the crop and the quality. Not like it is the case now when there is chaos in the industry,” he said.
Malawi has a long history of tobacco production tracing it from 1920s. Currently, the country is among 10 leading producers of tobacco.
However, the World Health Organization (WHO) targets the smoking rate to drop by almost 50% as of 2030 as a result of its anti-smoking lobby.
Statistics from WHO indicates that 18% of the total world population for men and 1% of the total world’s total population for women smoke tobacco.
Meanwhile, Malawi’s 2021 tobacco marketing season has ended with a rise in total tobacco sales and money the country has realized, as compared to that of last year.
Statistics from Auction Holdings Limited (AHL) indicates that a total of 123.7 million kilograms of all tobacco types were sold, from which the country realised US$197.1 million.
AHL’s Spokesperson Teresa Ndanga described the marketing season as a success by also looking at the average price that has risen compared to that of last year.
The statistics indicate that this year’s average price is at $1.59/kg thus higher than that of last year which was at $1.53/kg.
“Increased volume of traded tobacco and better average prices in the 2021 tobacco marketing season had a positive impact on the earnings compared to the revenue realized in 2020,” said Ndanga.
Among the major types of tobacco, farmers have sold 104,218,047 kilograms of Burley with a total of US$155,346,149.25 realized.
The country has also sold a total of 16,758,185 kilograms of Flue Cured tobacco and has generated a total of US$37,382,666.64 while on the other hand, some farmers brought a total of 2,678,109 kilograms of Dark Fired tobacco that has produced money amounting to US$ 4,321,361.76.
The average price for each tobacco type was at US$1.49/kg for Burley, US$2.23/kg for Flue Cured and US$ 1.61/kg for Dark Fired tobacco.
Ndanga said this year’s marketing season was a success also by considering the fact that the rejection rate dropped, the development which signifies that a lot of farmers sold their tobacco.
“The seasonal cumulative no-sale rejection on the auction burley market was lower at 11% this year, compared to 66% registered at the end of the season last year,” said Ndanga in a statement.

The Malawi Government has urged tobacco growers to improve their farming practices if the industry is to reclaim its lost glory.

Minister of Agriculture, Lobin Lowe, made the call during TAMA’s 33rd Annual Congress held in Lilongwe under the theme “Adherence to Agricultural Labour Practices in the Wake of Withhold Release Order.’’

The minister expressed government’s commitment to ensuring that local farmers continue benefiting from their work.

He disclosed that his ministry has engaged the Tobacco Commission and other relevant stakeholders to strategise on best ways that can assist in promoting the sector. He said the strategies will be consolidated and developed into notices for parliament to enact into laws that will benefit tobacco farmers.

The minister further revealed that while his ministry is working at identifying an alternative crop to replace tobacco as the country’s major foreign exchange earner, efforts are also underway with other relevant government departments and agencies to come up with laws preventing illegal tobacco exports, a practice that has greatly affected crop’s local earnings.

TAMA president, Abiel Kalima Banda, described the meeting as a success and an eye opener to tobacco farmers considering that the crop is experiencing global challenges. He assured the farmers that it is TAMA’s responsibility to end woes affecting the once upon a time vibrant sector.

Commenting on 2021 tobacco selling season, the TAMA leader said he was satisfied that the year saw reduced rejection rates and increased prices offered to the farmers for their leaf.

Reports indicated that the reduction in the rejection rate from all the Auction Floors in the county was mostly attributed to high sensitization of farmers on Non-Tobacco Related Materials (NTRM) which affect yield quality and its market pricing.

Panthunzi Eco-Solutions, the organisers of the Blantyre Farmers Market says they intend to utilize the monthly event for the promotion of organic farming. ?

Project Director Chris Walker says the Farmer’s Market will soon be hosting a number of activities including mobilizing people into a network that will produce home grown food using organic farming practices.

“We are looking at starting a Blantyre Urban Food Production Network of home grown food with organic farming and permaculture as means of food of production,” says Walker adding that the monthly Farmers Market event will provide a marketplace for local producers, as well as inspiring and motivating local producers and associations.

The Director says the permaculture concept was adopted from the system of how forests exists in biodiversity and interconnection, “so this place is about that as we tend to bring people together in a relaxed and open environment.”

According to Walker, it is much healthier to practice organic farming compared to inorganic especially to consumers of the produce because no chemicals are applied to crops.

“All along we have promoted organic farming because the current farming practices involves the application of a lot of chemicals to crops which is unhealthy to people eating it,” he explains pointing out that they further intend to promote the Made-In-Malawi concept since all products displayed at the Market pavilions will be locally produced.

Panthunzi Eco-Solutions will also promote entrepreneurship skills amongst participants by conducting business management workshops emphasising on marketing.

“We will train vendors in marketing so that they have relevant techniques on how to keep attracting clients even when they are not attending the farmers market.”

Walker, however, notes that Covid-19 and lack of disposable income for buyers are suffocating market performance because patronage at the event, especially for tourists, who attend the event in large numbers, has been greatly affected.

Established in 2018, the Blantyre Famers Market is supported by Panthunzi Eco-Solutions in partnership with The Truss Project. It is hosted at Glass house located in the outskirts of Blantyre Central Business district, along M1 road in Kabula.

Government says it is in the process of introducing new banana plant varieties to regain the glory that the crop lost to Banana Bunchy Top (BBTD) virus, which ravaged 11 countries in the sub-Saharan Africa in 2016.

Agriculture Minister, Lobin Lowe, said the districts of Mulanje and Thyolo, famous for some of the lost naturally-flavored varieties, will be case studies on the effects of BBTD and how the banana virus disrupted livelihoods as imported species dominated the local market.

In Mulanje alone, the disease affected 6,000 hectares of land, affecting 185,000 farming households.

“The Ministry is lobbying farmers in affected areas to uproot all bananas from their farmlands in order to replant new disinfected ones,” he said explaining that the process has, however, been facing resistance from some farmers who were used to the old variety.

Lowe said that to ensure that its production is doubled, the ministry will be introducing the new crop in other districts while using the two districts as trial epicentres.

A study by the Food and Agricultural Organization (FAO) of the United Nations shows that, in 1999, Malawi registered a sharp increase in the production of the banana crop from 93,000 tons in 1998 to 300,000 tons.

Figures from the World Bank show that Malawi earned more than $6.6 billion from banana sales in 2015, before production dropped sharply due to Banana Bunchy Top Virus.

BBTD was first detected in Nkhata Bay, where it is believed to have been brought by smugglers. Infected plants are dwarfed from their early growth stages and do not bear fruit.

Minister of Agriculture Lobin Lowe says he is impressed with how the multimillion dollar Agricultural Commercialization Project (AGCOM) is fairing in commercializing local daily farming in the country.

The Minister made the remarks on Wednesday when he toured Thyolo district to appreciate dairy farming activities being carried out by Mangunda Milk Bulking Group.

Lowe expressed excitement at the knowledge and skills the famers had on how to sustainably run daily farming.

“Am really impressed with how the project is fairing in terms of the economic empowerment of farmers, especially women,” he said noting that the design of the program was to attain production sustainability through animal cross breeding and the provision access to markets through the producer and off-taker arrangement.”

But the minister admitted that the existing 3% withholding tax and pricing constraints suffocate farmer’s business growth. He then promised that his ministry will consult widely to address the two issues.

On the withholding tax, he indicated the need to revise the 3% tax deduction arrangement since government expanded the tax band of withholding tax to be subjected to income of over K100-thousand.

According to a snap survey conducted around local retail outlets by the Milk Bulking group, milk farmers yield less when compared to the profits made by an off-taker. It was revealed that an off-taker sells a litre at K1,200 yet he purchases the same milk at Mk210 per litre.

Lowe asked the group to put its house in order as it looks in the possibility of facilitating the acquisition of milk processing unit so that the farmers can reap meaningful returns from their labour.

He added that ministry, through the department of Animal Health and Livestock Development, is currently in the process of analyzing a piece of legislation that will facilitate establishment of a Milk and Milk-Product Board, which will, among others, negotiate prices on behalf of the local farmers.

In his remarks, AGCOM National Coordinator Dr. Teddie Nakhumwa said the project’s development objective is to increase commercialization and competitiveness of agricultural value chain products in crops, livestock and fisheries.

He said it intends to rectify fiscal constraints encountered by small and medium scale farmers such as poor access to organized markets, poorly organized farmers and farmer groups, poor access to competitively priced finance and poor market infrastructure.

“The project provides 70% matching grants for the purchase of capital equipment and also insures that farmers lend from commercial banks to finance operations by guaranteeing 70% of their loans,” he said adding that the project also provides public infrastructure through connecting producer organisations to power, irrigation and road infrastructure—in what is known as Last Mile Infrastructure.

The project only supports producer groups that have formal arrangements with off-takers to promote a business culture among small and medium scale milk farmers.

And one of the project beneficiaries Elizabeth Mwalama, a 51 years old widow based in Chimwanga village T/A Naseta in Thyolo district hailed the project for helping in transforming people’s economic statuses.

“My life has been transformed through this project. Initially, I had no capacity to support my five children, but with the daily farming that was introduced to us through our milk bulking group, I can now afford a smile knowing my financial struggles are over” said Mwalama.

AGCOM has so far approved 45 PAs, out of which, 25 have already paid the required 30 percent contribution and are already accessing funds from AGCOM for implementation of the sub-projects. Over 400 hectares of land for local and foreign investments have been identified to secure an enabling business environment for PAs.

The Tobacco Commission (TC) says it expects an improvement in tobacco prices during this year’s selling season.

CEO Chidanti Malunga said in an interview that TC in coordination with the Ministry of Agriculture is doing everything possible to ensure that farmers benefit from their works by, among other things, ensuring that they are offered attractive prices.

He said one way of making sure that farmers are supported is by setting minimum buying prices every year for buyers to adhere to.

Malunga, however, expressed worry over the reduction in number of tobacco farmers who registered to grow the crop this season. Reports indicated that the number of growers this season has gone down by 5% when compared to the number of farmers who registered last season.

He, therefore, said TC has developed strategies designed to increase the number of tobacco farmers during the next growing seasons.

Tobacco Association of Malawi (TAMA) Spokesperson Sam Kalimba commented that the number of farmers interested to grow tobacco was declining because of low market prices for the leaf and World Health Organisation championed anti-smoking lobby.

Kalimba, however, said despite challenges the industry is facing, there is still hope for the local leaf which he said still enjoys huge demand. But he urged farmers to produce the leaf in line with trade demand and following all good agricultural practices.

“There is still huge demand for local tobacco and what is required is growing the leaf using good agricultural practices, including recommended labour practices,” said Kalimba adding that agricultural extension advisors are also critical in ensuring quality production by participating farmers.

Local agricultural experts have forecast bumper yields in Malawi this year, a development they attribute to good rains being received throughout the country and government’s initiated Affordable Input Program (AIP)

The experts predict that small scale farming households will achieve national food security while surpluses will be sold to strengthen household financial bases.

Famine Early Warning Systems (FEWSNET) published on its website this week: “Farmers are anticipating good harvests this year, as overall cummulative rainfall from October 2020 to March 2021 is expected across the country, with localized areas above average and below average possible. At national level, average to slightly above average production is expected,”

Agricultural analyst Tamani Nkhono Mvula agreed that good rains coupled with the subsidized farm input program have given the country hope for bumper yields. He expressed optimism that there is a possibility of continued good rains, until the end of the season.

“We have really been receiving good rainfall in almost all parts of the country which coupled with the increase in number of AIP beneficiaries who planted hybrid seeds gives us hope for better yields this year. If rainfall continues with the current pace, then bumper yields are guaranteed,” said Mvula.

But Mvula complained that the only thing that might affect the yields are the fall-army worms that have attacked some gardens in some parts of the country, particularly in the central region.

Farmers Union of Malawi (FUM) also complained that the fall army worms might have a negative effect to the anticipated yields.

FUM President Frighton Njolomole, therefore, urged all Extension Planning Areas (EPA) to be alert.

Ministry of Agriculture spokesperson Gracian Lungu said even if results of first round yield estimates were not yet officially released, there were strong indications that the country would produce more maize this year, due to the increased uptake of inputs and good rains.

At the onset of the rainy season, the Meteorological and Disaster Management Department (MDMD) forecasted that the country would receive good rains this season.

Tobacco Association of Malawi (TAMA) says there is still hope for the tobacco industry as demand for the local leaf is high despite a slump in global economy due to the novel coronavirus (Covid-19) pandemic.

“Demand for Malawi tobacco is still there, all we need is promoting growing using recommended agricultural practices that also include recommended labour practices. Agricultural Extension advisors from different players in the industry are working together to ensure these messages reach the farmer and are adhered to,” said Kalimba.

He, however, said the local tobacco industry has not been spared from Covid-19 which has affected most economic sectors.

Kalimba said in a bid to minimize challenges the industry is currently facing due to Covid-19, TAMA has put in place some initiatives aimed at protecting producers of the country’s prime revenue earner.

He said labour in the tobacco sector is one of the areas that have been affected this season, as farmers are advised to reduce their labour force to decongest their farms as a way of preventing transmissions, which the TAMA spokesperson said is a threat to the industry that requires more people to produce quality leaf.

TAMA in conjunction with the Ministry of Health is currently conducting sensitization meetings with farmers who are advised to follow all preventative measures government set in the fight against the respiratory infection.

“The impact of Covid-19 has not spared any sector including tobacco production. Labour is one of the factors impacted as efforts to have work places decongested are being enforced and there is also labour scarcity where communities have been hit. TAMA is advising farmers to follow government’s set preventative measures so that farm operations do not stall,” explained Kalimba.

Meanwhile, TAMA has suspended this year’s Growers Meeting which is held in February every year, as enshrined in TAMA’s constitution as a prevention measure against the spread of Covid-19.

TAMA in collaboration with Ministries of Health and Agriculture has developed Covid-19 messages which are being distributed to farmers, advising them on how they can help in the fight against the pandemic. The messages are in languages used by targeted farming communities for them to easily understand.

Besides Covid-19, low tobacco prices and World Health Organization’s (WHO) championed anti-smoking lobby are some challenges affecting the tobacco industry which remains Malawi’s top foreign exchange earner.

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