COVID-19: How the pandemic has impacted tea trade in East Africa

The Mombasa tea auction, known as the world's largest black tea auction, has been facing challenges amidst the COVID-19 pandemic. Handling about 75% of tea exported through the port of Mombasa, the auction caters to shipments from various East African Tea Trade Association member countries. Edward K Mudibo, the Managing Director of East African Tea Trade, shed light on the impact of the pandemic on the tea industry in a recent interview with CNBC Africa. Initially, the pandemic led to dwindling demand for tea within the region. Mudibo highlighted that unlike competing countries like India and Sri Lanka, East Africa managed to continue its auctions without lockdown disruptions. This resulted in increased demand and higher prices initially. However, the situation has since normalized, leading to reduced prices and volumes. Currently, tea prices stand at around $1.89 per kilogram, reflecting the ongoing challenges faced by the sector due to fluctuating demand. Amidst the challenging market conditions, the Mombasa tea auction has been adapting its operations to navigate through the crisis. Initially, the auction venue was shifted to the Bandari Maritime Academy to enable social distancing among buyers. Subsequently, the auctions transitioned to an online platform, allowing buyers to participate remotely. The shift to online auctions has enabled business continuity without the need for postponements. Despite these adaptations, tea prices have still been lower compared to the previous year, with prices hovering around $1.85 to $1.89 per kilogram. Globally, the tea market comprises around 6 billion kilograms of tea, with a demand of approximately 5.8 billion kilograms. Kenya alone accounts for roughly 500 million kilograms of tea production, with other African countries collectively adding up to about 700 million kilograms. Kenya stands out as the largest tea exporter in the world, with 95% of its tea being exported. The industry plays a pivotal role in the GDP of African nations, contributing significantly to foreign exchange earnings. In Kenya, the tea sector constitutes 4% of the GDP, while in other key tea-producing countries like Uganda, Rwanda, and Burundi, it accounts for around 2%. Despite its economic importance, challenges persist within the sector that hinder its full potential. One of the key challenges is the lack of clear national tea policies in some countries, affecting the tea production and market access. Additionally, the high levels of production have led to decreased prices, impacting the profitability of tea producers. Infrastructure bottlenecks, such as delays in border crossings, further exacerbate the challenges faced by the sector. To address these issues, governments are urged to implement policies that support the tea sector's growth and sustainability. Climate change also poses a significant threat to the tea sector in the region. The changing climate patterns have begun to impact tea production areas, affecting both the quantity and quality of tea produced. Strategies to adapt to climate change, including reforestation efforts and sustainable agricultural practices, are crucial to ensuring the resilience of the tea sector against the evolving climate conditions. Despite these challenges, the tea trade in East Africa remains competitive, with key players from various countries participating in the Mombasa tea auction weekly. The sector's resilience and adaptability will be instrumental in overcoming the current challenges and ensuring its continued growth in the future.