Cumulative earnings from tea, one of the country’s export crops, has dropped by 39 percent year-on-year to $2.7 million (K1.2 billion) from the previous year’s $4.4 million (K1.9 billion), according to a latest report.
In its monthly economic review for March 2015, Reserve Bank of Malawi (RBM) has attributed the “relatively lower earnings” to lower prices as a result of increased production on both local and international markets.
In March, according to the report, $1.7 million (K765 million) was realised from tea sales during the review month, which was higher than $1.2 million (K540 million) realised during the same period last year.
“Tea sales through the Limbe auction market amounted to 1.1 million kilogrammes in March 2015, higher than 0.9 million kilogrammes sold in March 2014,” reads the report in part.
Cumulative volume of sales amounted to 1.9 million kg compared to 2.9 million kg in the same period in 2014.
At the auction, tea prices averaged $1.44 per kg in March, which is lower than $1.51 per kg fetched in the same period the preceding year.
In March 2015, tea production amounted to 6.9 million kg compared to 7.4 million kg produced in the same period last year.
Production for the year to March 2015 stood at 18.5 million kg, representing a decline of 15.1 percent compared to the amount produced in a similar period in 2014.
Last month, Tea Association of Malawi (Taml) courted parliamentarians in Lilongwe on ‘Malawi Tea Week’; an initiative aimed at encouraging domestic consumption of tea, which will start August/September.
Currently, domestic consumption of tea is at a meagre two percent of the country’s average annual production of 46 000 metric tonnes.
“This disproportionately skewed consumption is worrisome as the industry becomes over-exposed to external consumption factors, which are largely uncontrollable but volatile and render business management difficult,” said Taml chief executive officer Clement Thindwa.
He said tea has superior scientifically proven health attributes relative to other beverages, adding that this will be the core message in the promotion programme.
The country’s tea industry is second to tobacco in the generation of foreign exchange, which accounts for about seven percent of gross domestic product (GDP) and employs over 60 000 people, making it the largest formal labour employer after government.