Why Ugandan tea farmers are picking peanuts from toil?
The problem, sector players say, ranges from the poor quality crop to factors beyond their control, such as lingering effects of the Russian invasion of Ukraine.
So far, farmers here have earned between $0.05 and $0.09 per kilogramme of green leaf, insufficient to cover the cost of production.
For growers to break even, the Uganda Tea Association (UTA) says the price of green tea should be above $0.13.'The crop levels of Uganda are very low as is across the region. We, therefore, expect that the quantities shall remain low for a while till after the expected rains of the upcoming season set it,' says Victoria Ashabahebwa, Uganda Tea Association board chairperson.
Raising green leaf farm gate prices depend on the factory's respective business capacities, according to Onesimus Matsiko, a consultant.
The challenge, he says, is that most of the processors who set the prices are also earning barely enough for them to recoup production costs, highlighting the crisis Uganda's multimillion-shilling tea economy has been locked in impacting export earnings.
A February 25 report of the Parliamentary Committee on Tourism, Trade and Industry confirmed the crisis in Uganda's tea industry saying it is struggling to stay afloat since the Russia-Ukraine war broke out in February 2022, leading to a global economic shock, depressing demand for tea and causing prices to fall.
The slow recovery of the industry has caused anxiety among farmers, especially those from the Rwenzori region in western Uganda, who are protesting what lawmakers call absurdly low prices, with some even cutting down their tea bushes.
The situation is dire, with the average price of Ugandan black tea in the Mombasa auction falling sharply from around $2 per kilogramme of made tea to the current less than $1 per kilogramme, below the production cost, the lawmakers noted.
The green leaf price has declined by over 50 percent, from Ush600 ($0.16) to Ush200 ($0.05) per kilogramme, with some farmers fetching as low as Ush140 ($0.03) per kilo. Tea sales at the Mombasa auction have also gone down, largely because traditional big buyers are facing internal turmoil.
Government officials said they have tried to revive the sector including the provision of subsidised fertiliser and allocation of Ush126 billion ($32.6 million) to tea processing factories. But it didn't amount to much, according to the report.
The Uganda tea industry, just like peers in the region, has also been impacted by the effects of the climate change, seeing longer dry seasons, leading to reduced yields and quality.
The entire region has relied on Egypt, Pakistan, UK and some Middle Eastern countries to buy their tea.
Syndigate.info).
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