Malawi: Ray of Hope for Malawi's Tobacco Industry

6 August 2020

Expectations are high that the local tobacco industry will receive a boost from one of the biggest buyers of Malawi tobacco, Phillip Morris International (PMI), following revelations that one of its smokeless cigarette technologies has been authorised by the United States' Food and Drug Administration (FDA).

The development brings a new ray of hope to Malawi, which has seen earnings from the green gold sharply declining in recent years due to the global anti-smoking campaign championed by the World Health Organisation (WHO).

The authorisation of the new technology will increase the demand for tobacco from the buyer and translate in increased production and earnings for the country.

PMI published on its website that the new product called IQOS, which has an electronically heated tobacco system, was authorised for marketing as a modified risk tobacco product (MRTP) by the FDA on July 7, 2020.

FDA concluded that the IQOS system, which heats tobacco but does not burn it, significantly reduces the production of harmful and potentially harmful chemicals that are emitted from smoke when tobacco is actually burned.

The FDA's decision is consistent with earlier conclusions of other leading regulatory and scientific bodies, including in the UK, Germany, and the Netherlands, which have found that the product emits lower levels of harmful toxicants.

PMI's Chief Executive Officer, André Calantzopoulos is quoted as saying: "The FDA's decision is a historic public health milestone. Many of the tens of millions of American men and women who smoke today will quit - but many won't.

"IQOS is a fundamentally different product than combustible cigarettes and must be regulated differently, as the FDA has recognized.

"Now, more than ever, there is an urgent need for a fundamentally different conversation on a cooperative approach to achieve a smoke-free future."

In 2019 Malawi realized only about $232 million after selling 160 million kilograms of all types of tobacco, an indication that the tobacco industry is fast declining.

The proceeds, if not for the $212 million realized in 2017 after selling 106 million kilograms, could have been the lowest in the past six years.

In 2014, for example, Malawi realized $361 million from the sale of 192 million kilos which declined to $337 million in 2015 despite maintaining production.

In 2016 production slightly went up to 195 million kilos but earnings fell sharply to $276 million.

Although the future of the tobacco industry and its impact on the economy remain uncertain the move by the US FDA has raises hopes that Malawi's fortunes in tobacco production and marketing could turn around.

Tobacco remains Malawi's top export crop and foreign exchange earner.

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