Agriculture in Malawi • Contributes over 35% to national GDP, • Employs over 80% of the labor force • Contributes over 80% of the export earnings
REPUBLIC OF MALAWI Ministry of Transport and Public Infrastructure
Safege Consultants for the European Union and the World Bank Ministry of Transport and Infrastructure
Malawi Transport Sector Multimodal Development and Potential PPP Study 1 : Commodities transport demand
Workshop in Lilongwe, 29th of July 2010, Capital Hotel Lilongwe 8/6/2010
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8/6/2010
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PRODUCT : TOBACCO SPECIAL CONDITIONS : PERISHABLE
About Tobacco
LOCAL PRICE
$1.75/kg
NATIONAL PART
RECENT PRODUCTION
• Most valuable production in Malawi (230 000 tons in 2009, 2/3 of exports in value) • actual logistics
INTERNATIONAL PRICE PACKING MODE :
M ODE
ROUTES
Road & Sea
BEIRA
Containerised
DURBAN
232 140 TONS WEIGHT
%
DESTINATION
70%
Central Region
69641,30
30%
Kasungu,Dowa Poland
GROUPING PT
TIME (days)
Germany Beira Route
Auction floors
35 US$79/t/k m
50 US$79/t/k m US$107/t/k m
The Netherlands Durban Route
35 US$120/t/km US$72/t/k m 35 US$120/t/km US$72/t/k m
Spain
45 US$120/t/km US$80/t/k m
Egypt
30 US$120/t/km US$75/t/k m 25 US$120/t/km US$70/t/k m
Austria
30 US$120/t/km US$75/t/k m
Liwonde
Factories (Processing) Lilongwe or Limbe Fumigation containerization
INTERNATIONAL PART
US$70/t/k m US$85/t/k m
The USA Belgium
Southern Region Turk ey
Lilongwe (50%) Limbe Mzuzu
Sea freight Sea freight
35 US$79/t/km
Dedza
Mangochi
Secondary auction floors Warehousing of wet Tobacco in railway stations Intermediate buyers to collect, group and sell
$/T/Km
Road to fob Road to fob
Mchinji
Mzimba
Satellite depot
COST $/TON
Lilongwe,
Rumphi,
Collection of bales
279 TONS
EXPECTED PRODUCTION 2020 ORIGIN
162498,70
Northern Region Russia
Fertilizers Green leaves
$
BALES
40 US$120/t/km US$120/t/k m
PACKING MODE
CONTAINERS 40' high cube containers
232 140 TONS
RECENT EXPORTS M ODE
CORRIDOR WEIGHT
Road & Sea
BEIRA
Containerised
DURBAN
%
DESTINATION
GROUPING PT
Germany
Beira Route
162498,70
70%
Central Region
69641,30
30%
Kasungu,Dowa Poland
Break Bulk to Joburg Where it is fumigated and sealed in containers for Durban
279 TONS
EXPECTED EXPORTS 2020 ORIGIN
Lilongwe,
The USA
Dedza
Belgium
Mchinji
TIME (days)
COST $/TON
$/T/Km
Road to fob
Sea freight
35 US$79/t/km
US$70/t/k m
35 US$79/t/k m
US$85/t/k m
50 US$79/t/k m US$107/t/k m Durban Route
35 US$120/t/km US$72/t/k m
The Netherlands
35 US$120/t/km US$72/t/k m
Northern Region Russia
45 US$120/t/km US$80/t/k m
Rumphi,
Spain
30 US$120/t/km US$75/t/k m
Mzimba
Egypt
25 US$120/t/km US$70/t/k m
Southern Region Turk ey Mangochi
30 US$120/t/km US$75/t/k m
Austria
40 US$120/t/km US$120/t/k m
Liwonde
NOTES:
Export (June to november)
8/6/2010
Nacala Beira
Durban 3
Dar Es Salam
Tobacco exports in 2009 232 000 tons
Mtwara
Criteria for exports
Rumpi Mzimba
Kanona
4
Processing and packaging
Conditions At Port
Time of arrival
Pricing of land leg
Long Term contracts
Current Choice of corridor
Tobacco (1st Logistic Chain)
Green leaves in Bulk Fumigation at Joburg then sent to Durban
Very important
Less that sea leg
X
Road to Joburg
Tobacco (2nd logistic Chain)
Fumigation at the factory Limbe or Lilongwe In 1000 kg sacs then containerised
Good storage and handling facilities Idem
X
Road to Beira Nacala rail corridor
Exports Chipata
Nacala Moatize Tete Chiwawa Nsanje Port Liwonde Mangochi
Malawi is 60% dependent on tobacco exports for its non aid foreign earnings. The expected growth rate for 2020 is not that great due to Anti Smoking lobby in Western markets. Malawi has diversified into other major cash crops such as Sugar,Tea,Cotton, Coffe and pulses The discovery of Uranium in Karonga at Kayerekera will also boost the economy. Mining already in progress and exports comenced in December 2009
Criteria of choice of an export transport chain for Tobacco
Mbeya
Luzaka
8/6/2010
Harare 162,000n ton (70%)s
Chinde
Very important
Beira 69,641 tons(30%)
8/6/2010
Joburg
Durban
Germany, Poland, USA, Belgium, Russiia, Spain, Egypt, Turkey
Conditions of a possible transfer to Nacala’s corridor (in 2015)
Germany, Poland, USA, Belgium, Russiia, Spain, Egypt, Turkey
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8/6/2010
Railway in good conditions between Lilongwe and Nkaya
Use of railway from Auction Floor to factories
Use of Nacala Rail Corridor
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