By Nelson Mandela Muhoozi
In response to struggles faced by the tea industry, the Uganda Export Promotion Board (UEPB) is spearheading efforts to explore new markets, particularly in the United Arab Emirates (UAE) and the broader Middle East.
A recent letter, dated August 5, 2024, written by Lawrence Oketcho on behalf of the Executive Director of UEPB, outlines ambitious plans and the steps being taken to revitalize the sector.
UEPB’s strategic move
In the letter, Oketcho references a meeting held on June 13, 2024, at the UEPB, during which plans for a sales mission to the UAE were discussed.
The primary objective of this mission is to market Uganda’s tea directly to buyers in the UAE and the Middle East, aiming to boost sales and increase revenue for tea farmers who have been struggling in the current economic climate.
The mission is scheduled for September 1-7, 2024, and includes a significant opportunity: the Dubai Multi-Commodity Centre (DMCC) has offered to market a 20-foot container of Ugandan tea in the UAE, a potentially game-changing move for the industry.
Testing, quality assurance
Sector players under the Uganda Tea Association have been required as one of the key elements of this initiative to submit tea samples to the DMCC Tea Centre for testing.
The board said the results of these tests will guide the selection of teas to be packed in the container destined for the UAE market.
John Bosco Lwere from the Uganda Export Promotion Board said what they are trying to do is looking at how to get direct buyers for the tea so that farmers can earn more money.
However, Lwere said that there is still a lot to do in terms of quality and other sector interventions.
He said this careful selection process highlights the importance of quality in securing and maintaining international markets, a point also emphasized by various stakeholders within the tea industry.
Farmers reactions
Tea farmers and industry experts have met the UEPB’s efforts with cautious optimism.
Kennedy Rwaboona, a tea farmer, praised the move, expressing hope that it marks a turning point for the industry.
“It’s a move in the right direction,” Rwaboona said, adding that he hopes stakeholders and policymakers have learned valuable lessons from the ongoing tea crisis, which has persisted for nearly two years.
Onesimus Matsiko, a tea sector expert and national chairperson of Uganda tea outgrowers association (UTOA), offered a more measured response.
While he acknowledged the importance of marketing, he warned that these efforts would not yield the desired results without a corresponding focus on improving product quality.
Matsiko recalled a similar initiative in 2018 when Uganda aggressively marketed its tea in Egypt. Despite initial success, the momentum waned, and the benefits did not fully materialize due to underlying issues in the tea value chain.
“The processors carry a bigger share of industry failure compared with the government,” Matsiko noted.
He emphasized the need for a commercially sustainable game plan that involves both farmers and processors working together to improve quality.
Matsiko also pointed out that while the global demand for tea is running below supply, this does not justify Uganda abandoning the tea industry. Instead, he called for continued engagement with the government to address the sector’s challenges.
Quality versus market challenges
The issue of quality versus market availability is a recurring theme among stakeholders. William Mbonigaba, another tea farmer, highlighted the complexity of the tea value chain, noting that it involves numerous interest groups, including out-growers, large plantations, processors, marketers, and transporters.
He questioned whether the interests of all these groups are being adequately addressed, particularly in terms of quality and pricing.
“The quality-price knot lingers unknotted,” William said, expressing concern about the future of smallholder tea farmers, especially if the government fails to deliver the much-needed fertilizer on time.
He stressed the importance of organizing out-growers to ensure timely delivery and application of fertilizer, which he believes could significantly improve the quality of Uganda’s tea.
Political overtones
The conversation around Uganda’s tea industry is not without political overtones. Richard Katongole, a tea farmer, warned against politicizing the industry’s problems.
He argued that sly innuendos and hints of threats, particularly those targeting the government, could backfire and alienate potential allies who are crucial for finding solutions.
Katongole urged stakeholders to focus on articulating the industry’s challenges and proposing workable business solutions rather than resorting to political maneuvering.
John Nuwagira, another industry insider, echoed this sentiment, calling for greater collaboration between farmers and processors.
He cautioned that while low green tea prices (at sh130 farm-gate price and less than sh3000 at Mombasa Auction) might seem advantageous for some players in the short term, they pose significant risks in the long run.
Nuwagira emphasized the need for a united front to address the industry’s challenges and ensure its sustainability.
The UEPB’s initiative to seek alternative markets for Uganda’s tea in the UAE and the Middle East represents a crucial step towards revitalizing the industry.
However, as stakeholders have pointed out, these efforts must be accompanied by a renewed focus on quality and a collaborative approach to addressing the challenges facing the sector.
While the road ahead may be fraught with difficulties, the collective determination of Uganda’s tea farmers, processors, and policymakers could pave the way for a brighter future for the industry according to some sector patrons.
Gregory Mugabe, chairperson of the Uganda Tea Association (UTA), said the association has asked out members to submit samples for testing.
Depending on results from the samples, he said the initiative will be another avenue to earn an extra coin, adding that “If the buyers approve out teas, then we can negotiate better prices.”
Farm-gate prices hit record lows
Over the past one year, farm-gate prices have seen a steep decline, plummeting from around sh500 to a current range of sh130 to sh300.
In some areas, Matsiko says middlemen are offering as little as shillings 130 per kilogramme, with the person harvesting the tea taking shillings 100 of that sum.
“This leaves farmers with a paltry shilling 30 per kilogramme — an amount insufficient to maintain their tea gardens, let alone turn a profit,” he says.
The dwindled farm gate prices, he said, is one of the most significant cost-cutting strategies by factories that depend on tea outgrowers’ leaf to survive in the challenging environment.
