Low prices continue to haunt Malawian tea on the auction floors, a bitter irony for some producers as the country is regarded as the pioneer of tea-growing in Africa.
Commercial production started way back in the 1880s during the British colonial era. Large tea estates have since then been a feature of the southern region of the country. Tea was planted for the first time in Malawi in 1878.
The tea-growing areas boast sprawling estates that are also tourist attractions.
The country’s current annual tea exports stand at about 43,000 metric tons, contributing three percent of global tea exports, according to the Tea Association of Malawi (TAML), an association of 10 major tea growers in the country.
The crop is the country’s second biggest foreign exchange earner, contributing 7.9 percent of total export earnings, says the Malawi Confederation of Chambers of Commerce and Industry (MCCCI). Tobacco remains the main foreign exchange earner.
The southern Africa country ranks second after Kenya as the largest producer and exporter of tea in Africa. It is also twelfth on the global list of tea producing countries.
But despite the country’s prominence in the cultivation of this crop, Malawian tea producers complain that the price for Malawian tea is low when compared to its neighbour, Kenya.
Auction floor prices at the end of 2007 showed that the local produce was selling at 1.44 dollars per kilogram for the top grades. Kenyan tea, on the other hand, was fetching up to 3.31 dollars per kilogram at the time.
Lack of competition on the tea auction floors in Malawi is the main factor that is crippling the local tea sector, according to Sangwani Hara, TAML chairperson. He ascribed Kenya’s higher prices to the benefits of competition among a range of buyers. Another factor is that, unlike Kenya, Malawi does not have its own tea brand.
‘‘Kenya has a brand that attracts buyers. Here in Malawi, TAML is working on branding the local tea but it will need money,’’ Hara said.
Malawian tea is exported to European, Asian and U.S. markets. Kenyan tea, on the other hand, also has big buyers coming from Egypt, Pakistan and Russia on top of the traditional markets that it shares with Malawi.
The MCCCI says the tea industry in Malawi has been stagnant for a long period of time even though tea production has been increasing. Additional investment is necessary through joint ventures with Malawian companies to improve the farming methods and processing of the crop.
Malawi’s tea production was expected to reach higher production levels of 45 million metric tons for 2007. Of the 45 million metric tons for 2007, about 2.5 million metric tons was sold locally, says Hara.
The problem of low prices has existed for the past few years. But tea growers want to take the bull by the horns and reverse this trend.
Hara indicates that TAML, in collaboration with the Malawi Investment Promotions Council, is working towards attracting more buyers. One of the strategies is to come up with the country’s own local brand of tea.
The MCCCI has identified a new opportunity in the processing of green tea for East Asian markets.
Tea prices hit a record 29 dollars per kilogram at a charity auction held in Malawi’s commercial capital Blantyre on November 27, 2007.
IPS
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