Just as it has been a bad year for tobacco whose earnings have dropped eight percent this year, tea, the country’s second foreign exchange earner, is expected to also register a drop in output and earnings due to dry spells.
Despite not giving figures of the expected drop in output and earnings, Tea Association of Malawi (Taml) chief executive officer Clement Thindwa said in an interview this week this year’s drop will be a record in many years.
Tea is one of the major export crops as it brings in eight percent of export earnings, contributes seven percent to gross domestic product (GDP) and employs over 60 000 people, making it the largest formal labour employer after government, with figures showing that 1.5 million people rely on the tea industry for livelihoods through knock-on and ripple effects.
Malawi’s average tea output is 46 000 metric tonnes (MT). A record output of 52.2 MT was recorded in 2009, according to Taml figures.
Said Thindwa: “We [as an association] are worried with the tea output this year. Early cut off of rains has affected the output. In terms of tea production, we are quite worried as Malawi’s propagation is almost wholly dependent on rains and there is little irrigation happening.
“It is only at Kawalazi Tea Estate [in Nkhata Bay] where there is highest level of irrigation. The streams in Shire Highlands of Thyolo and Mulanje are dry. We cannot irrigate when there is no water.”
To prove that the situation is bad, Limbe Tea Auction, located along Kidney Crescent in Blantyre, is transacting less volumes of the commodity every Tuesday. At one time in September, the auction took only 10 minutes of trading “showing how bad the situation is”, according to Thindwa.
Economic experts have said the drop in tea output and, subsequently, earnings is not good for the economy which needs every foreign exchange it can get to beef up its forex reserves buffer.
A latest Monthly Economic Review from Reserve Bank of Malawi (RBM) released this week shows that tea prices averaged $1.63 (K896) per kilogramme (kg), which is better than that of last year recorded at $1.37 (K753) per kg.
Malawi is the second largest producer of tea in Africa after Kenya but domestic consumption of the commodity is at a paltry two percent of average annual production of 46 000 MT.
“This disproportionately skewed consumption is worrisome as the industry becomes over-exposed to external consumption factors which are largely uncontrollable but volatile and render business management difficult,” a tea industry expert said. n