The FCTC and the Pattern of Unmanufactured Tobacco Exports in

Report
NIH Trade and Tobacco Control
The FCTC and the Pattern of
Unmanufactured Tobacco Exports in
Malawi
Donald Makoka.
Centre for Agricultural Research and Development
LUANAR
University of Cape Town, South Africa
July 17, 2014
Introduction
• The economy of Malawi is heavily agro-based:
•
Agricultural sector contributes over 29 percent of the country’s
Gross Domestic Product (GDP);
• Accounts for over 82.5 percent of its foreign exchange earnings
• Directly supports over 90 percent of the population
• 84.5 percent of the total labour force is employed in the
agricultural sector, with the majority working as smallholder
farmers.
• Tobacco is the main export crop.
• Malawi has been exporting tobacco since 1893 (Wilshaw, 1994).
• Today, Malawi is the world’s most tobacco dependent economy
(Otanez et al. 2009)
• Almost all the leaf produced is exported unmanufactured.
2
Introduction
• Top Ten Tobacco Producing Countries in the World in 2012, (MT)
3
Malawi Main Export Commodities in 2012
4
Research Question
• The debate around the FCTC continues to take centre-stage
•
Tobacco leaf growing continues to shape the politics of tobacco
control in Malawi.
• Policy makers often weigh the health benefits of tobacco control
against the potential economic losses that may be brought about
by tobacco control
• The central question that the paper attempts to answer?
• Is there a difference in the pattern of Malawi’s
unmanufactured tobacco external trade during pre-FCTC
period (2000-2005) and after the FCTC was introduced
in February 2005?
5
Methodology and Data
• The study uses time series data from the International Trade
Centre (ITC)’s Trade Map.
• The Trade Map provides trade statistics for international business
development.
• Trends in unmanufactured tobacco imports and exports were
analyzed using trade statistics covering the period 2000 and
2013.
• The data were classified into two groups:
• The pre-FCTC period covering the period 2000 to 2005;
• The FCTC period covering the period 2006 to 2013.
6
Result 1: RISING EXPORT VALUES
• Value of Malawi’s Tobacco Exports (US$, 000), 2001-2012
7
Results: RISING EXPORT VALUES
• Growth in Malawi’s Tobacco Values (%), 2001/2-2012/13
54.7
39.6
29.2
28.7
16
6
3.3
-2.4
2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13
-11.4
-16
-16.8
-23
• Tobacco exports have growth by an average of 12.6% between 2005/06 and
2012/13
8
• For the pre-FCTC the annual growth was 1.7%
Result 2: Steady Imports from Neighbouring Countries
• Sources of Malawi’s Imported Tobacco Leaf in 2013
• Total imported leaf was valued at US$89.912 million; 88% was imported from
Zambia.
9
Result 2: Steady Imports from Neighbouring Countries
• Share of Zambia’s Unmanufactured Tobacco Export Volumes
by Destination, 2001-2013.
10
Result 3: Access to Traditional Markets Maintained
• Destination of Malawi’s Tobacco Exports (2005-2012).
11
Result 3: Access to Traditional Markets Maintained
• Share of Malawi’s Tobacco Export Volumes by Destination,
Pre-FCTC and the FCTC Period.
12
Summary and Conclusions
• Up until now the threat of the FCTC on Malawi’s access to
European markets has not been significantly felt.
• The data do not also agree with the assertion that Malawi is now
looking to China and other Asian markets for its tobacco exports,
as the proportion of Malawi’s tobacco that is exported to China
has remained below 4% between 2005 and 2012.
• Similarly, its share of tobacco exports to other Asian countries
(Republic of Korea and the Philippines) has not gone beyond 7%
per year.
• At least in the short term, Malawi will continue to rely on the
European market for its exports.
• The flow of unmanufactured tobacco between Zambia and
Malawi has continued unabated even after the signing of the
FCTC in Zambia in 2008.
13
Summary and Conclusions
• In the short term, the large United States based tobacco leafbuying companies (Universal Corporation and Alliance One
International), through their Malawian subsidiary companies –
Limbe Leaf Tobacco Company and Alliance One Tobacco
Company- will continue to advise Malawi on tobacco-related
trade policies that attempt to undermine the global tobacco
control agenda (Otanez et al, 2009; Otanez et al, 2007).
• Up until now, however, the Malawian policymakers may not yet
be losing their sleep over the FCTC.
14
Summary and Conclusions
15
Sale of Tobacco Leaf, 2013 – Lilongwe Auction Floors
16
End of Presentation
Thank You for Your Attention
17

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