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Tanzania Launches Tea Auction

Tanzania in November held its first tea auction, fulfilling a government mandate to stop exporting locally grown tea through the Kenyan port of Mombasa.

In the sale held in Dar es Salaam on November 13, buyers from nine international firms purchased 1,320 packages totaling 66,920 kilograms. Four suppliers offered teas. ARC Mountain received the auction high of 92 cents per kg of PF1 (Pekoe Fanning) grade tea. Total sales were $24,024, according to Vision Tea Brokers, the firm that conducted the auction.

The auction and related infrastructure improvements are part of a national program to increase tea production from 23 million kg in 2021/22 to 90 million kg per year by fiscal 2029/30. Planning for the tea auction began five years ago.

Gerald Mweli, permanent secretary for the Ministry of Agriculture, and Mary Kipeja, director general of the Tea Board of Tanzania, attended the launch.

“Apart from minimizing market costs, the auction will empower Tanzanians economically,” said Kipeja. Players throughout the value chain will benefit, including buyers, brokers, warehouse operators, transporters, and port facilities, said Kipeja.

“More Tanzanians will be enticed with interests in tea cultivation and management, increasing production and quality of the produce,” she said, adding that the auction would increase transparency and make Dar es Salaam a regional hub providing services to tea-growing countries in East Africa.

The weekly auction will sell teas from Tanzania, Burundi, the Democratic Republic of Congo, Malawi, and Uganda. Tea will be warehoused, then shipped from the Dar es Salaam port and Port Tanga. Tanzania hopes to sell 65,000 packages a week, about one fourth of Mombasa’s average weekly volume of 247,000 packages, which vary in weight.

The East Africa Tea Trade Association (EATTA), which operates the Mombasa tea auction, said Tanzania’s auction did not impact its twice-weekly sales. Mombasa is the world’s largest tea auction by volume and, in 1992, became the first tea auction outside London to sell teas from multiple origins. Sales of teas from ten countries are offered year-round. The auction handled as much as 545 million kg per year before the pandemic. Volume fell to 482 million kg in 2022, according to local press.

Tea is one of Tanzania’s top five food exports, generating a 2013 high of $57 million in foreign exchange revenue. Export value declined to $30 million in 2022. The Tea Board of Tanzania estimates that direct employment is 50,000 and rising.

Source: STiR