Five cigarettes cost a minimum of $10, but could be more than that depending on the mood of the person selling them, she said.
She said she was particularly worried about one man she spoke to, who she said had tried to be brave on the phone, but had sounded angrier and more tense.
"He sounds like he's going to flip out or hit someone," she said.
The prisoners had told her that they'd witnessed "a couple of kids" getting a "hiding" over cigarette debts they had accumulated.
She herself had deposited $170 into the account of one inmate, a young man who was in for the first time, because he had been beaten up by three men for his cigarette debt.
In asking her to contact the media, they wanted simply to let people know what was really going on, she said.
Mr Kaiwai said more than 67 per cent of the prison population identified as smokers before the ban and the change had gone "extremely well".
There had been 20 incidents of smoking or smoking-related equipment - tobacco pipes, cigarettes, filters, cigarette papers, matches and lighters, found at Whanganui Prison in July, but no increase in prisoner-on-prisoner assaults since before the ban, with no serious assaults of this kind at the prison since July 1.
He said staff were "vigilant" in looking for prisoner "trade" activities, but they had not noticed any increase since the ban was introduced.
Mr Kaiwai said any prisoner with knowledge of others engaging in trade activity were encouraged to report it to staff, or call the anonymous Crimestopper line. The same went for any prisoner or visitor feeling pressured to bring contraband in.
Their methods of stopping contraband entering the prison had been adapted so prisoners and visitors attempting to introduce tobacco or lighters face consequences, he said. Visitors could be prohibited and prisoners face internal charges, including cell confinement and loss of privileges if the charge is proven.
"We are and will continue to offer a range of smoking cessation support to prisoners, this includes supplying nicotine replacement therapy and ongoing assessment by prison health staff."