JB stuns industry on first tea auction

The Tea Association of Malawi (Taml), a grouping of large tea estates, says it is surprised with the pronouncements by President Joyce Banda that government will establish the ‘first ever’ tea auction floor in Malawi this year.

In her State of the Nation Address on Friday at Parliament in the capital, Lilongwe, Banda said this will “allow tea to be sold in the country”.

“It is hoped that this will help Malawi maximise foreign exchange earnings from tea sales. Furthermore, Malawi will be able to overcome the foreign exchange lean period experienced between October and March,” said the President.

But Taml chief executive officer Clement Thindwa, in an interview on Sunday, said as far as they are concerned, they have had a local Limbe Tea Auction running for more than 15 years.

“So, we are equally surprised that there will be the a first tea auction,” he said.

Thindwa said if Malawi Government wishes to set up a second local market, the industry has no qualms about it, adding that they believe in a liberalised and competitive market economy with more players.

“If anything, the tea industry made a proactive initiative through the Ministry of Industry and Trade, Reserve Bank of Malawi and the Ministry of Agriculture through a task force so that we have more players in the industry’s trade,” he said.

Tea is one of Malawi’s export crops, second to tobacco, which contributes half of the country’s foreign exchange earnings.

Figures from Taml indicate that in 2012 (January to December), export revenue from tea jumped to K16 billion (about $40m), a 50 percent increase from the previous year’s K10.7 billion (about $26.7m).

The revenue realised is out of 41.8 million kilogrammes of the commodity exported, down from the previous year’s 44.8 million kg, a drop of seven percent.

Output last year also dropped 10 percent to 42.4 million kg from the previous year’s 47 million kg, according to the figures, largely to unfavourable weather conditions particularly in the tea growing districts of Thyolo and Mulanje.

In her address, Banda said one of government’s significant achievements will be to intensify the production and diversification of cash crops that have a bearing on the exports.