Tea exporters in Rwanda are reeling as prices drop to an all-time low of below $2 per kilogramme on the international market, due to low demand and oversupply.
Before the Covid-19 pandemic hit the sector, the country exported up to 9,317 tonnes of processed tea worth Rwf25 billion ($27.6 million) between January and March 2020, compared with Rwf20 billion ($21.8 million) the same period last year.
Prices started dropping in the second quarter as key buyers closed shop due to the restrictions imposed on movement of goods and services due to the pandemic.
Rohith Peiris, the general manager of Sorwathe, a tea growing and exporting company said. "The first half of the year has been tough. Tea prices have been declining significantly; a kilogramme of processed tea now stands at $2 on average. It was $3 and above per kilo last year. "This is the lowest it has ever been. The prices fluctuate, even below $2 per kilo," said.
Pie Ntwari of the National Agriculture Export Board said, "Tea consumers have sharply reduced and some established buyers have already closed. This explains the reduction of prices on the international market."
He added that Rwanda was exploring new markets including the Middle East and Russia.
The higher prices recorded between January and March are largely attributed to bigger auctions. India played a big role leading to an increase in demand for the East African auction, before being greatly affected by the pandemic.
John Baffes, the senior agriculture economist with World Bank's Development Prospects Group said, "Tea prices, especially at the Kolkata and Colombo auctions, increased recently, while prices at the Mombasa auction remain subdued. Kolkata and Mombasa auctions reached 13 and six-year lows, respectively.
"In response to ample supplies in Kenya, there have been disruptions of tea shipments to various importing countries, and disappointing demand (in part due to the lockdown in India)."
He added that tea prices (auction average) are "expected to drop 10 per cent in 2020 mostly due to weak demand, before experiencing a relatively softer recovery in 2021".
Tea exports to top three global markets declined significantly in the first quarter as the world grappled with the Covid-19 pandemic.
Source: Allafrica.com
CHAI Bora Tanzania has applauded the government's efforts in supporting local industries and farmers in producing quality tea.
Speaking yesterday in Dar es Salaam during the 44th International Trade Fair in Dar es Salaam, Chai Bora's Marketing Manager, Ms Awatif Bushiri said the efforts made by the government in support of local industries has upgraded farmers and enabled industries to produce quality products with added value as Chai Bora's company did.
"As evident from this year's theme, Industrial Economy for Employment and Sustainable Trade, the government has created conducive environment for the country to reach the middle-income economy through Industrialisation.
"We thank our government for its efforts in promoting local industries through various platforms. As a company that also focused on the export market, selling across the border in Kenya, South Africa, UAE, Rwanda and Ghana, this platform is one of the many ways we expand our product destination", said Awatif.
She said agriculture is an important sector as the country heads towards robust industrial economy.
Almost 75 percent of the workforce lives in rural areas and the majority of them are involved in the farming sector, contributing to about 50 per cent of the country's GDP.
Chai Bora takes pride in being a household item, and more for creating a source of income to not only people employed in their factory but also to farmers who are the main supplier of the company's raw materials.
Ms Bushiri added that despite the recent coronavirus crisis, we are happy that the government continues to promote local industries through platforms such as Sabasaba exhibition while continuing to take caution against the pandemic.
"The current trends in agriculture offer a huge opportunity to support the industrialisation vision and create income for the majority.
"Agriculture already accounts for a large portion of the country's exports, and there's room to grow," she said.
Ms Bushiri urged other local producers to use the 44th International Trade Fair to explore opportunities to sell products beyond the country and we encourage Tanzanians to buy local products," she explained that.
Chai Bora Limited started in 2006 as an independent firm. Chai Bora blends, packs and makes high quality brands while creating meaningful employment opportunities in Tanzania and the region.
Chai Bora has just been acquired by Catalyst Principal Partners and the company has a vision to create the leading beverage business in Tanzania with presence in SADC region.
Source: allafrica.com
CASSAVA production offers immense untapped opportunities for extending labour use in the country and exploits price peaks in food market that would ultimately lead to increased earnings for smallholder farmers.
Tanzania is among the three African countries that produce about 70 per cent of Africa's cassava output alongside Nigeria and the Democratic Republic of Congo.
Cassava has huge potential to boost farm incomes, reduce rural and urban poverty and help close the food gap.
Globally, cassava is the fourth most important staple crop after rice, wheat and maize, and plays an essential role in food security.
Currently, about half of the world production of cassava is in Africa. Cassava is cultivated in around 40 African countries, stretching through a wide belt from Madagascar in the Southeast to Senegal and to Cape Verde in the Northwest.
Cassava processing for value addition is not only an important strategy for addressing post-harvest losses but the potential to create additional employment opportunities along the supply chain.
This is because cassava starch is an important source of biomaterial for different food and non-food industrial applications.
It is from this backdrop that Roijok Progress Centre has for years being involved closely in promoting farmers' efforts in cassava production with the end goal of boosting their earnings as important tool in the fight against poverty.
The Managing Director of the Roijok Progress Centre, Ms Rose Urio said they have worked with smallholder farmers through contract farming while assuring them reliable markets for their products.
"The initiative that goes through the whole cassava value chain has transformed smallholder cassava farmers through increased productivity while boosting their earnings for improved living standards," she said.
She said among the many successes that the organisation posted in working with smallholder farmers includes the empowerment of women and youth take active part in cassava production.
Cassava is one among the foods produced in more than 17 regions in Tanzania, more than 60 industries in the country source their raw materials from cassava and as much as health is involved cassava has much protein and the best lithium is found in cassava flour.
Due to cassava's growth characteristics and ability to grow in poor soils and regions prone to drought, it is preferred by resource poor farmers in many tropical countries.
While cassava plays an important role as a food security crop for subsistence farmers, it is prone to rapid postharvest deterioration.
Moreover, farmers producing cassava can increase their income by finding alternative end uses to home consumption.
To meet the high demand for cassava in Tanzania, cultivar selection, production and processing all need to be improved.
Enabling policies that create satisfactory business opportunities for small holder farmers, traders and processors for starch industries is also critical.
Ms Urio thanked the government for the encouragement in the effort to promote cassava production and particularly when the parliament in 2017 declaring the crop as one with immense business opportunities that would lift farmers from poverty.
She said Roijok Progress Centre has been engaging in cassava production for eight years with their main goal being that of commercialising cassava to boost farm-ers' earnings and contribution to economic growth.
Throughout this period, the organisation has been involved in various campaigns to create awareness particularly on best cassava farming practices and how farmers can explore other potentials along its value chain.
For example, one of the successful campaigns was Cassava for life which was held in Tanga Region in collaboration with the Ministry of Agriculture through which they managed to secure new markets within and outside the country.
Furthermore, the Managing Director pointed out the fact that of all the other products, cassava product has almost more usage and benefits in the world than other food products.
Apart from being food for human being and animals, cassava has other important use namely for making clothes, papers, mixing colours as binders, all batteries use lithium and the best lithium is found in cassava.
She noted that her company has opened up a large door which helps different people to fight against poverty where they have been sending people out of the county like USA to learn more about agriculture and many youth are happy for getting this opportunity as well as empowerment programme.
Ms Urio, as the founder of the Roijok Progress Centre has played a greater role in encouraging youth and women to work hard and become successful.
All these efforts were recently recognised after emerging an award winner of MALIKIA WA NGUVU in 2016 and in 2019 as winner on Women Empowerment.
She is also a motivator and a mentor to many youth and women in different matters. As an integral component most Cassava in Tanzania are an integral component of most cropping systems and among the more important staples in many zones.
It plays an important role as a food security crop and provides useful opportunities for extending labour use and exploiting price peaks in the food market.
Source: allafrica.com
WAS hinted by the World Bank last year, that sooner than later Tanzania would graduate from Low income economic category to a more advanced lower middle-income economic level.
As it's common to any society built on different schools of thought, this incident drew opposing responses - some chest thumped for the milestone while others loathed the upgrade.
This essay is in no way trying to play a "judge - complainant - accused" role, but to unearth the unseen truths behind this accession and to remind everyone that both, the jubilants and critics, have points that needs to be taken into account.
It has taken 59 years for Tanzania to arrive to the position where it is, a journey that involved trying two distinct economic philosophies - socialism and capitalism - and draw a number of lessons which benefited both the experimenter and outside observers.
From per capita income of around 200 US dollars in the late 1980s - when economic liberalization policies began - to 1,100 US dollars in 2020, no sane person can coldly welcome the tremendous transformation. Apart from policies put in place by hosting countries, foreign investors are highly interested in the purchasing power of the local market.
Consumers with stable income are likely to spend more on products and services made in the particular country than not, and in some cases, the first criterion outweighs the latter. It is a no brainer that Mauritius, with a GNI per capita of 12,740 US dollars stands to be an attractive destination for Nestle processing plant than say, Togo, with 690 US dollars GNI per capita.
An assumption behind is that the consumers in 'richer' markets are likely to spend more as they earn more than their counterparts with smaller per capita.
However, it is prudent to put this clear that, this measure doesn't mean that everyone in Tanzania earns that amount of money per year, or that the Bretton Wood institution arrived to that conclusion after getting every citizen's bank accounts' records. Far from truth.
Per capita income is obtained after dividing country's Gross Domestic Product (GDP) with its population. GDP or national income, as it is referred in some accounts, is a monetary value of all the finished goods produced in the country in a specific period of time.
GDP is yet another confusing measurement as it does not give the 'redistributive' picture to anyone who tries to get an individual progress in that particular country. Take this example; Kenya has got a GDP that is currently over 95 billion US dollar, higher than Tanzania's 63 billion US dollar.
Nonetheless, Kenya supremacy in productivity has little relationship with curbing the poverty rate to majority of its citizens. World Bank statistics shows that the country has 36 per cent of its people living below 1.9 US dollar per day, whereas Tanzania with relatively low GDP and bigger population has recorded only 26 per cent people under a poverty rate.
What happens is that few brands like Azam, Azania and MO can triple their production and end up giving a country a false impression of total progress. So, the cold reception of this development deserves to be taken with a grain of salt since per capita income measurement is a dividend of 'misleading' GDP.
But there are challenges which will be associated by this accession that Tanzania has to be prepared to handle. Tanzania is a beneficiary of a number of non - reciprocal trade agreements that offers it a preferential treatments, which includes agreements like EU's Everything But Arms (EBA) and UNCTAD's Generalized System of Preferences (GSP).
Taking EBA as an example, a scheme grants all Least Developed Countries (LDCs) a full quota and duty free access to EU Single Market for all products with an exception to arms and armaments. Thanks to this arrangement, our coffee, horticultural products and pulses have been finding smooth landing in European markets for years.
According to United Nations Conference on Trade and Development (UNCTAD) - which has the ownership of LDCs classification mandate - a country will be regarded as an LDC if has per capita income of less than 1,025 US dollars among other criteria.
As of now, Tanzania has already crossed that mark with more than 70 US dollar threshold.
In essence, countries like Botswana, Cape Verde, Maldives, Samoa and Equatorial Guinea, graduated from LDC status and were subsequently removed from EBA's benefits in years 1994, 2007, 2011, 2014 and 2017 respectively, Tanzania stands be the next loser of benefits offered by the scheme once all the three criteria, have been proved to have been met by the member states.
Besides, we can still have our long sigh, as this is not a knee - jerk response, it may take some time before the UN committee approves the status. For the time being, we got to prepare ourselves by crafting some intelligent bilateral agreements with our major markets and lowering costs of doing business in the country to make our products more competitive.
Source: Allafrica.com
Malawi is among the top five countries in Africa to benefit from the Common Market for Eastern and Southern Africa (Comesa) digital financial inclusion plan.
The regional bloc, Comesa is implementing a digital financial inclusion plan aimed at promoting trade within the region and includes marginalised communities, which are excluded in terms of financial inclusion.
This was made known last week at a high-powered business case validation meeting held in Lusaka, Zambia.
Governor of the Reserve Bank of Malawi Dr. Dalitso Kabambe in his keynote speech said: "Interoperability is key to commercial banks and network operators for the uptake of digital financial services; it enhances Small and Medium enterprises (SMEs) trade through facilitation of seamless money transfer."
Comesa Business Council chief executive officer, Sandra Uwera expressed gratitude to the Malawi Government for supporting the Digital financial Inclusion initiatives, which will increase intra-trade within COMESA region by at least 10% annually.
Project Manager for Digital Financial Inclusion at COMESA Business Council, Dr. Jonathan Pinifolo said: "The North-South corridor is the most extensive corridor system in the region, linking the largest number of countries in eastern and southern Africa.
"The countries we are working with in this region include Malawi and Zambia, and out of the 21 countries, they have picked nine countries in Africa based on the trade activities taking place within the various trade corridors.
According to Pinifolo, the nine countries include; Mauritius, Egypt, Ethiopia, Zambia, Malawi, Kenya, Uganda, Rwanda and Tanzania in EAC.
Pinifolo further explained that Comesa has already developed a business case report and follow up interventions which include harmonising Finance and ICT policy frameworks within the region, capacity building of Micro, Small and Medium Enterprises (MSMEs)
"We have also developed the commissioning of a regional integrated digital common payment scheme incorporating commercial banks, Mobile Network Operators, Fintechs and other institutions providing financial services," said Pinifolo.
Speaking during the opening ceremony, Assistant Secretary General for Programmes at COMESA, Ambassador Dr. Kipyego Cheluget said that COMESA as a strong advocate for enterprise growth and development of our local and regional markets, the meeting was held in a timely period when they are focusing on the growth of Small and Medium enterprises.
"Africa's economic transformation lies in the ability to increase value addition and strengthen the participation of our SMEs in national and regional supply chains", said Cheluget.
Among other institutions, the business case validation was attended by Reserve Bank of Malawi, MACRA, Ministry of Finance and Economic Planning, Ministry of ICT, Ministry of Trade and Industry, Malawi Confederation of Chamber of Commerce and Industry (MCCI), Commercial banks (National Bank of Malawi and Standard Bank), Telecommunication Operators (Airtel and MTL), NITEL, SPARC Systems, ICT Association of Malawi (ICTAM), NABW, Bayer, National Association of Small and Medium Enterprises (NASME), Legis Policy Associates from Kenya and Kiani Holdings from South Africa.
The Common Market for Eastern and Southern Africa is a free trade area with twenty-one member states stretching from Tunisia to Eswatini.
Comesa was established when a treaty was signed on November 5, 1993, in Kampala, Uganda, and then ratified the following year in Lilongwe, Malawi, on December 8, 1994. It replaced the former Preferential Trade Area (PTA) that existed in 1981.
Source: allafrica.com