Tea Association of Malawi (Taml) has said tea packers in the country can now bid for tea in dollars, but buy in kwacha, a departure from an old system where buyers only paid in dollar terms.
The move will ensure that the local market has enough supply of premium tea, Sangwani Hara, chairperson of Taml, told Business News on Thursday.
“At a tea sector task force meeting we decided that as one of reforming the sector, packers should be allowed to bid for tea in dollars at the auction, but pay in kwacha terms.
“It is a development that will encourage more tea packers buy top grade tea and sell it on the local market,” he said.
Of late, the market has seen an influx of imported tea because local packers halved supply of their products on the local market due to shortage of foreign exchange, among other factors.
Tea and Coffee Merchants Association of Malawi chairperson Ross McDonald welcomed the development saying as international markets for Malawi tea dwindle, the country should create local demand for its tea.
“The best Malawi can do is to promote consumption of tea. It is strange that 100 percent of locally produced tea is exported,” he said.
McDonald said Malawi currently produces between 40 and 50 million kilogrammes (kg) of tea annually, of which only one percent stays on the local market.
“But so far, export quality has suffered, there is need for all stakeholders to take keen interest in the sector and ensure that we maintain the quality of tea that Malawi is famous for,” he said.
One of the tea packers, Wills and Alpha Limited, who have launched a new tea brand, Williams Tea, said the decision will help local packers to produce competitive products.
“Tea is expensive to buy. When we were being asked to pay in dollars, we were struggling for foreign exchange. However, with the policy, we will manage to meet local demand as our customers pay us in kwacha,” said Williams Sichinga, managing director of Wills and Alpha.
The tea industry is the largest formal sector employer in Malawi, employing 50 000 workers.n