Monday, 18 April 2011

More trouble in Malawi

124 Malawian tobacco farmers have been fined for trying to smuggle tobacco out of the country. Tobacco is a key cash crop in Malawi but prices at Malawian markets are low this year. Government has several times suspended trading and attempted to convince or force buyers to increase prices. Prices in neighbouring countries are reportedly far higher. Farmers have asked the government to open the borders so that they can sell on other markets. The government has not done so. According to Malawi's Tobacco Control Commission, this is the worst season in recent years.

Tobacco is Malawi's biggest foreign exchange earner. A poor year at the tobacco market is very bad for the country, and the government. Foreign exchange shortages are thought to be the reason for severe and sustained fuel shortages that led to protests - put down with force -earlier this year. The reduction in foreign exchange income is a blow for the government and may lead to further problems, such as fuel shortages and high food prices (though import- and fuel-related price hikes)

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