East Africa is expecting an increase in tea export earnings in 2012 despite the prolonged drought that affected productivity at the start of the year.

Industry managers in Kenya, Rwanda, Burundi and Tanzania said they are anticipating huge foreign exchange earnings due to high prices that result from low production.

However, Uganda, the second largest tea exporter in the region after Kenya, is projecting flat earnings this year citing severe drought experienced in most areas where the crop is grown.

George Ssekitoleko, the executive secretary of the Uganda Tea Association told The EastAfrican that Uganda is likely to earn approximately $90 million from its tea exports, the same amount it earned last year.

“We expect an average of 52 million kilogrammes of tea exports compared with 56 million kilogrammes in 2011,” Mr Ssekitoleko said.

Uganda experienced prolonged drought between January and April, leading to wilting of tea leaves.

Kenya’s earnings

But unlike Uganda, Kenya is expecting an increase in tea export earnings by at least Ksh2 ($22.9 million) or Ksh3 billion ($34.3 million) despite lower export volumes, according to the East African Tea Traders Association (EATTA), which manages the Mombasa Tea Auction — the largest black tea auction in the world.

“Tea export earnings for this year are likely to be two or three per cent more compared with 2011 because of better prices,” EATTA chairman Peter Kimanga said.

Mr Kimanga said tea prices this year averaged $3.16 per kilogramme at the Mombasa auction compared with $2.99 per kilogramme last year.
Uganda, Tanzania, Rwanda, and Burundi also export their tea at the weekly auction in Mombasa.

Kenya earned Ksh109 billion ($1.2 billion) from its tea exports in 2011 compared with Ksh97 billion (1.1 billion) in 2010.

Mr Kimanga said Kenya is also projected to export 370 million kilogrammes, down from 377 million kg last year. In 2010, Kenya shipped 399 million kg.

Kenya’s prediction, however, comes  at a time tea exporters in the country are pushing for a review of a levy introduced in January this year by the agriculture ministry of one per cent per kilogramme of tea exported, threatening to boycott the country’s produce.

READ: Tea exporters want levy reviewed

The traders said the ad valorem (according to value) tax imposed on the country’s local tea need to be reviewed as it will make Kenyan tea uncompetitive and reduce farmers’ earnings.

The government said the levy was meant to encourage home consumption, a claim experts dismiss, saying Kenyans are still poor consumers of tea.

In Rwanda, the National Agriculture Export Board director general, Alex Kanyankore, said the country expects a 4.3 per cent increase in tea exports this year, resulting in a 11.5 per cent increase in earnings.

Mr Kanyankore said Rwanda expects to export 24 million kg of tea worth $68 million compared with 23,000 million kg valued at $61 million exported in 2011.

Rwanda’s earnings

“Rwanda is expected to record an increase in tea export earnings due to a rise in the quantity of output and better prices,” Mr Kanyankore said.

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Tanzania, though it could not estimate the actual earnings, expects to register an increase this year. In 2011, Tanzania exported 21.1 million kg of tea worth $47.2 million.

“I cannot predict the exact export earnings (and quantity), but based on figures from previous years, we hope the earnings will increase,” a source at the Tea Board of Tanzania, who preferred anonymity told The EastAfrican.

Burundi tea export earnings have already surpassed 2011 earnings in the 10 months up to October this year, due to a sharp rise in volumes and prices.

Joseph Marc Ndahigeze, an official at Burundi Tea Board said revenues from exports between January and October reached $22.7 million, topping the $22.2 million collected in 2011, and $18.2 million earned in 2010.

Tea is Burundi’s second largest foreign exchange earner after coffee, and supports some 300,000 smallholder farmers in the country of eight million people.

The East African region exports its tea to among other countries: South Africa, the UK, Netherlands, Pakistan, Germany, Ireland, the United Arab Emirates and India.

According to the Food and Agricultural Organisation, black tea exports are projected to reach 1.52 billion Kilogrammes in 2021 with similar growth rates projected for both Africa and Asia. Black tea exports reached 1.14 billion kg in 2010.

However, by 2021, export volumes for Asia are projected to reach 745.15 million kg compared with 637 million kg for Africa.