Malawi and Tobacco Essay -- Trade Tobacco Malawi Essays

Malawi and TobaccoWhat strategies can Malawi use to overcome puzzles relating to a modify in demand of its primary(prenominal) export, baccy.QUESTION- what strategies can Malawi use to overcome problems relatingto a change in demand of its main export, tobacco?Malawi, a LEDC, dictated in Southern Africa, has a population of 10million. Tobacco is its main export and this provides the majority ofthe countries export revenues. It has become dependant on tradetobacco to firms based in MEDCs such as the United States. pack forcigarettes has recently decreased because of health and ethicalreasons. Cigarettes, has reached the end on its fruit lifecycle.However South East Asia remains a growing grocery store, because of the effect of globoseisation and dumping. The decrease in demand is amajor problem for Malawi, a country that is not merchandise orientated ormarket aware. Decline in demand for cigarettes will obviously piss adirect effect on demand for tobacco because they are laudatoryproducts. With decreased demand for its crops of tobacco, Malawi willfind itself in a really dangerous situation that will not only threatenits stinting position but the very lives of its population.Another concern that Malawi must stockpile into account is the state of thetobacco industry. At present the market could be described as anoligopoly (see appendix) where suppliers compete on price. The outcomeof this is that the firms involved have a high market share andtherefore have much power to control supply and demand. They have thepower to control prices of tobacco and they can exploit countries likeMalawi. The national economy is dictated by exports of tobacco. Thedecreased revenue, due to loss of demand, will an... ...E UK (BRANDS)Two firms, Gallaher and Imperial Tobacco, who amidst them, controlaround 80% of the market, dominate the cigarette and tobacco market inthe United Kingdom. One other major firm, British American Tobacco( at-bat), manufactures cigarettes in the UK but sells almost all of themabroad. In 1999 BAT merged with Rothmans International therebyincreasing its share of the world tobacco market to 15.4%, just behindthe world leader Philip Morris which controls 17% of the globalmarket.BIBLIOGRAPHYhttp//www.ash.org.uk http//www.tobacco.orghttp//www.mcspotlight.orghttp//www.cdc.govhttp//www.sas.upenn.edu/African_Studies/Country_Specific/Malawi.htmlhttp//allafrica.comwww.google.co.ukwww.bbc.co.ukwww.altavista.comwww.theguardian.co.ukNuffield Business and economics- Students Book