seven East and Central African countries are among the world’s top 20 producers of tea. In crop-size order for year 2003, they are: Kenya 290,000 MT; Malawi 45,000; Uganda 35,000; Tanzania 25,500; Zimbabwe 22,000; Rwanda 15,500; and Mozambique 10,500. All of them - in common with virtually every other tea-growing country around the world - are currently producing much bigger crops than 10 years ago.
Meanwhile, global consumer demand has not kept pace with the expanding supply. Denis Daly, a regular buyer in the region commented, “For a long period of years, tea supply and demand were roughly in balance. But increasing volumes of medium-grade tea are coming on stream from Vietnam and China. Global production is out-stripping demand, and farmers should have every cause for concern about the future.”
Daly is chief buyer at Barry’s Tea, which has about 35% of the Irish retail trade, along with strong exports to the UK and USA. Ireland has the world’s highest per capita consumption of highest-quality teas. Along with Lyon’s Tea and Bewley’s, the bulk of the company’s overall purchases of tea are sourced from Kenya, Rwanda and Assam. Every Irish blend is very heavy on East African teas, accounting for up to 80% of the total import.
The swing towards high quality Kenyan tea - produced east of the Rift Valley - came in the late 1950s and early 1960s, processed in factories established by the Kenya Tea Development Authority (KTDA). Production has risen from 18,000 MT in 1963 to the current level of around 300,000 MT. Tea has become the mainstay of the Kenyan economy and its leading foreign exchange earner at around $437million.
About 400,000 smallholders, grouped under the KTDA, produce 62% of national production, and the rest by commercial estates such as those operated by Brooke Bond, Unilever and James Finlay.
Kenya’s production in 2004 is substantially higherhan the 293,000 MT of 2003, with a forecast up to 310,000 MT. With such a large increase - and the overhanging surplus from previous years - the government has been putting renewed effort into finding new markets, or expanding sales in traditional tea-drinking countries such as Poland, Russia, and the Middle East.
According to the Tea Board of Kenya, the country has maintained its hold in major tea markets as new ones continued to emerge. In the year 2003 the leading market, Pakistan, absorbed 72,008 MT compared to the previous year’s total of 63,137 MT. However, more friendly relations between Pakistan and India could lead to lowering of their former trade barriers. So, with that looming prospect of a possible decline in Kenya’s exports to Pakistan, the Board has stepped up its campaign to broaden the tea export base.
Both Egypt and UK have been taking around 50,000 MT each somewhat reduced from previous years. But other export markets such as Russia, Nigeria and Germany have shown encouraging increases. Afghanistan’s purchases have risen from 24,600 to 35,000 MT.
Kenya is the world’s third largest producer of black tea after India and Sri Lanka. Traditionally the country has been exporting all its tea in bulk form, but KTDA said it was hoping to increase the packaging of tea for foreign supermarkets.
Managing director Eric Kimani said, “I would like to see Kenya adding value up to 50% just like Sri Lanka and India. It will take time, but could possibly be achieved in five years.” He added that Kenya is currently exporting 14% of its tea in packets, compared with 5% a year ago, due to a sharp rise in packaging on contract with overseas buyers. “But there are major hindrances. Large capital investment is required. Secondly, penetration of overseas markets is not easy, when competing with companies that have been established for years in those countries.”
Meanwhile an internal campaign has aimed at persuading Kenyans themselves to increase their tea consumption. By promoting tea as a healthy drink, local tea sales have climbed by 10% from the normal level of around 12,000 MT.
However, these combined measures do not overcome the problem of the persistent market glut that is depressing producer prices. The Tea Board of Kenya (TBK) is seeking additional powers to control tea production at the farm level.
Stephen Nkanata, TBK’s managing director, said that unsold stock of 34 million kgs in 2002 was carried over to 2003; and that Kenya then carried forward 86 million kgs of unsold into 2004. That raised the level of available cumulative tea to 367 million kgs.
“Producers are advised to control tea area expansion in favor of quality improvement,” said Nkanata, amid industry concerns that production rate might soon surpass factory capacity. Eight more factories have been licensed, out of which six have since been commissioned, helping to reduce wastage.
Neighboring Rwanda is another source of highest-quality tea, though quantities are small compared with Kenya. During the genocide of several years ago, many factories were destroyed and the gardens neglected. But, since then, buyers’ support has helped Rwanda get back on its feet again. Crop estimates for the year are around 16,000 MT.
According to an UK Embassy report on the economy, “Approximately one third of the tea produced in Rwanda is considered to be of the highest quality by world standards, and an opportunity exists to market branded Rwandan tea. “Investment is being sought to develop products to serve the Ready-to-Drink market, and the flavored, spiced and specialty tea sectors. Rwanda’s tea factories are in the process of being privatized.”
In crop size, Malawi and Uganda come 2nd and 3rd after Kenya, producing medium grade teas in which specialty buyers have limited interest. With its 45,000-MT production, tea is Malawi’s secondlargest export, after tobacco. Malawi was the first country in Africa to grow tea on a commercial scale, started at Mulanje in the 1880s.
|Ready for Export - a truck passes a tea garden in Malawi.
Today, large commercial estates account for 93% of production, with the remainder grown by some 6,500 smallholders. Most of the estates are based in the districts of Mulanje and Thyolo, with ownership concentrated among 11 companies, of which the largest is Eastern Produce Malawi (EPM) which owns 21 estates. The major shareholder in the EPM company is the Linton Park Plc. group headquartered in Kenya. A minority shareholding is held by the Industrial Development Corporation of South Africa.
Roughly one-third of Malawi’s crop is sold through the Limbe Auction, with two-thirds sold direct. A high proportion of the tea is bought by major international companies such as Unilever and Lyons Tetley. The biggest export destinations are the UK and South Africa. The color and brightness of Malawi tea is a key factor in blending of leading British tea brands.
After a long period of economic disaster caused by tribal and territorial conflicts from 1972 onwards, in more recent years Uganda has seen a steady process of rehabilitation. From a record production of 23,000 MT in 1972, the industry collapsed to less than 5,000 MT in the 1980’s. Since then, output has grown both in quantity and quality to the current level of 35,000 MT. This has been achieved by a privatization policy and the return of estates to former owners.
The Rwenzori Highlands Tea Company has the largest areas of tea plantations and produces about 26% of Uganda’s crop. A spokesman for Finlay’s, who owns the tea company, said: “Since 1993 our plantations in Uganda have been rehabilitated over the last 10 years. The restoration of the abandoned properties has been completed and the factories are in first class order.
“Production has risen from 1,000 MT in 1991 to a present level of 9,000 MT, and a program of developing new tea areas has begun. The Rwenzori Highlands operation became the first tea company in East Africa to achieve ISO9001 certification, and is now pitching for ISO14001.”
Prior to the economic collapse, Uganda had been self- sufficient in food, thanks to its good soil fertility and favorable climate. The Uganda Tea Association, founded in 1948, had identified 200,000 hectares of land as suitable for commercial tea production. These areas are in the northern crescent of Lake Victoria, South and Western Highlands and the West Nile regions. Many of the tea estates and factories are deeply involved in environmental protection of woodlands, rivers and wetlands.
With production of around 25,000 MT, more than a fifth of Tanzania’s tea output is consumed domestically. Export of over 18,000 MT accounts for some $25m in Tanzania’s export earnings - the fifth largest export crop after cashew nuts, coffee, cotton and tobacco. The industry grew after World War II with expansion of commercial estates, followed by encouragement of smallholder tea farming after Tanzania became independent in 1961.
However, the smallholder share of output declined from 19%in 1975/76 to less than half that figure in 1999/2000. During that period, smallholder yields fell from 300 kg per hectare to 198 kg, while estate yields rose from 1,200 kg to 2,115 kg.
The largest of the estates is Brooke Bond with three factories and total production of around 9,500 MT. Most of the remainder comes from estates operated by the Mufindi Tea Company, East Usambaras, Tanwat and George Williamson.
Tanzanian teas are bright in color with a brisk flavor, ideal for blending. Exports go primarily to UK and Pakistan, while around 6,000 tons is sold through the Mombasa tea auction in Kenya.
Zimbabwe continues to struggle with the effects of inflation, which makes tea production difficult. But the crop is still essentially intact, at somewhere around 20-22 million kgs per annum, of which 8m kgs are exported. Quality and industry growth are protected.
Tanganda is the largest producer, packer and exporter of tea products in Zimbabwe, with four tea estates totaling some 2,000 hectares in the Eastern Highlands around Chipinge near the Mozambique border. These plantations account for about half of Zimbabwe’s tea production, and are rated amongst the world’s leaders in productivity.
Together with Southdown Holdings - the second largest commercial tea grower - a six-year program aims to develop 3,000 hectares of smallholder lands into tea, with technical and material support from the two companies. That includes availing up to 2 million plants annually from nurseries dedicated to smallholder production. Transport is provided for the collection of green leaf, and low interest credit facilities enable farmers to buy inputs like fertilizers.
Tanganda has recently completed feasibility studies on a tea plantation site at Espungabeira, across the border in Mozambique, as the company moves to spread the local risk and earn foreign currency. Four hundred hectares have been targeted for the plantation.
Reg Butler is a freelance journalist who covers the tea, coffee, and tobacco industries for Lockwood Publications. He can be reached via email at: email@example.com or firstname.lastname@example.org.