Africa Tea Farming Outlook

Published on 2nd August 2011

I am informed that last year global tea production stood at 4 billion kilogrammes which was an increase of 14 percent from 3.5 billion Kilogrammes in 2009. This upward trend is largely due to an increase in productivity and the high international prices that we have experienced in the last three years.

Over the same period global consumption increased by 15 percent, from 3.4 billion kilogrammes to 3.9 billion Kilogrammes. This was on account of population growth and aggressive promotion of tea as a healthy drink. This implies that there is very little surplus being carried over, hence a likelihood of increasing demand and prices globally.

Globally, tea is the most widely consumed drink after water and the most widely drank beverage. However, tea as a beverage faces competition from other drinks offered in the market. Other issues affecting tea worldwide include change in consumer tastes and preferences and high and rising cost of production.

In spite of these challenges, the future for the global tea industry remains bright. Some of the opportunities that the industry should seize include adoption of new technologies; product and market diversification and value addition. Product diversification, continued research and development in the tea industry present an opportunity for the industry to devise products aligned to the new and emerging sophisticated consumer demands.

Turning to Africa, the tea sector has become one of the largest industries both in terms of volume and financial value in many of our countries. The industry has contributed immensely to foreign exchange earnings, direct and in-direct employment to millions of people. Tea also contributes to rural infrastructural development, investment opportunities, and income generation to sustain livelihoods of many of our people. The industry therefore contributes immensely to eradication of extreme poverty and hunger, and ensuring environmental sustainability.

I am informed that Africa produces over 600 million kilogrammes of tea annually, accounting for 15 percent of the world's tea production. Out of this, Kenya produces 65 percent while Uganda, Malawi, Tanzania, Rwanda, Zimbabwe and Mozambique together produce 35 percent of the total. Overall, the continent accounts for 13 percent of the global tea production and 32 percent of global tea exports. In terms of consumption, Africa consumes about 300 million kilogrammes which is half of its production.

Despite this positive growth in the tea industry, Africa still faces challenges such as: inadequate value addition leading to export of tea in bulk, high cost of production, poor diversification and fluctuating international prices.

Despite these challenges, the outlook of the tea industry in Africa is very bright and promising. With Africa's population estimated at 1 billion, the continent provides a significant consumer base for African Tea, hence reduced dependence on external markets.

Kenya produces Black CTC tea and is the third largest producer in the world after China and India. We are the leading exporter of Black CTC tea in the world mainly because we consume only a small proportion of what we produce. Our tea is produced by both small scale farmers who account for 56 percent and large scale farmers who account for the rest. Last year we produced 399 million kilogrammes, which was 10 percent of the global tea production. This is compared to a production of 310 million kilogrammes registered in 2009.

In terms of financial value, tea earned our country 97 billion shillings in 2010 up from 73 billion shillings the previous year, to become the number one foreign exchange earner. It is therefore evident that tea is the most important single commodity for our economy and as a source of income for a large number of our people.

I would like to recognize the efforts and the important role that has been played by the East Africa Tea Trade Association, in facilitating tea trade through the Mombasa auction. The Auction remains the largest marketing channel for selling tea within the African continent. The volume of tea traded through the Auction is over 348,000 metric tons annually, which translates to 64 percent of the total annual tea production in Africa. Kenya alone trades about 260,000 metric tons through the Auction.

In view of the large volumes of tea traded at the Auction, I wish to encourage the East Africa Tea Trade Association to remain forward looking, embrace and adopt more efficient processes in line with emerging opportunities such as leveraging on ICT.

The sustainability of the tea industry in Africa will largely depend on a number of issues: How well as a continent we are able to respond to consumer demands; Compliance to international tea production standards; More partnership and investment opportunities and Mitigation measures against climate change.

Ultimately, the bottom-line of competitiveness will be the quality of tea we produce. I therefore appeal to our tea farmers to strive to produce quality tea that will continue attracting better prices that will help fight poverty.

By HE Mwai Kibaki,
President  of the Republic of Kenya

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