East African tea farmers to earn less as prices continue to drop

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By Annita Matsika, New Vision/NECJOGHA

Kampala, Uganda – East African tea farmers are likely to feel the pinch of low prices as international rates continue to drop from a high of $2.98 per kilogramme in 2017 to a low of $1.76 per kilogramme in July.

The decline comes as a result of overproduction amid depressed global demand, currency devaluation and instability in key markets in Asia and Africa.

Egypt, a key market that nearly collapsed due to the Arab spring, has been hit by high inflation that reached 20 per cent in 2018 but is projected to drop to 14 per cent this year while the UK continues to be unpredictable in the wake of uncertainties associated with Brexit.

The high inflation rates in Sudan, which hit 70 per cent and the recent political developments is another major worry for tea farmers while the reintroduction of US-led sanctions against Iran is bound to have far reaching ramifications to the tea sector.

Global tea production in 2018 was estimated at 5.85 billion kilogrammes up from 5.81 billion kilogrammes in 2017, a 0.68 per cent increase with Africa’s contribution standing at 717 million kilogrammes accounting for 12.2 per cent.

Total global exports were 1.8 billion kilogramme, with Africa contributing 654 million kilogrammes, accounting for 35 per cent.

However, global consumption posted a marginal 2.4 per cent increase to 5.6 billion kilogrammes compared with 5.4 billion kilogrammes in 2017.

Regional tea exporters including Kenya, Rwanda, Uganda and Ethiopia have been investing in high quality teas that are fetching premium prices.
Uganda is seeking to emerge as a major tea producer riding on quality.

The country is targeting to produce 100 million kilogrammes, while Ethiopia is making inroads in large consumer markets such as Pakistan, Egypt, UK, Sudan, Yemen, United Arab Emirates and Iran.

Close to 80,000 farming households are involved in tea production supporting more than 150,000 skilled and unskilled workers. Approximately, 1,000,000 people directly derive their livelihood from tea growing in Uganda.

 

 

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