By Nelson Mandela Muhoozi
Uganda’s tea industry is seeing a slight rebound, as evidenced by the recent Mombasa Tea Auction Sale number 37 on September 10, 2024.
The average price for Ugandan tea reached $0.99 (sh3,713) per kilogram, up from $0.83 (sh3,113) in August and $0.93 (sh3,488) a year ago. This improvement comes amid persistent challenges in production and market demand.
While Uganda’s tea prices have improved, the volume sold at the auction fell sharply to 6 million kilograms, a significant drop from 7.9 million kilograms last year.
Rwanda’s tea volume, in contrast, increased, and the country’s prices also rose to $3.26 (sh12,225) per kilogram, highlighting a growing market presence. Kenya’s tea price, however, fell to $2.08 (sh7,800), reflecting its ongoing struggles.
Onesimus Matsiko, a tea sector expert, attributes Uganda’s decreased volume to the lack of fertilizers and the abandonment of many tea gardens. Despite the modest price rise, this does not immediately alleviate the financial strain on Ugandan tea farmers, who are still battling low farm gate prices.
Market analysis from Tea Brokers East Africa Limited describes the auction as having “fairly good market demand,” though 47% of teas remained unsold.
Union Tea Brokers Limited reported that only 4.6% of Ugandan teas went unsold, compared to a high 71.6% for Kenya’s KTDA teas.
The Uganda Export Promotion Board’s recent mission to the UAE has stirred interest in Ugandan tea, owing to its competitive pricing.
However, Uganda’s tea industry faces a critical challenge in meeting international demand due to limited production capacities and quality assurance issues.
William Mbonigaba, a tea farmer, stressed the need for collaboration between factories to boost supply volumes and meet global buyer requirements.
The tea sector remains a vital part of Uganda’s economy, supporting around 100,000 households and providing approximately 150,000 direct jobs.
With annual tea production valued at approximately $80 million, there’s potential to significantly boost foreign exchange earnings.
Despite this, sector players said that government intervention has been slow, with delayed implementation of promised subsidies and support for the sector.
Experts called for urgent action, including restructuring loan financing and enforcing quality standards to ensure high-quality tea production.
Victoria Ashabahebwa of Swazi Highland Tea Co. Ltd advocates for a mandatory green leaf standard, which she believes could enhance Uganda’s competitiveness in the global market.
The tea industry’s recovery is a hopeful sign; however, she said sustained efforts and timely government support are crucial for long-term growth and stability.
