Malawi tea revenue drops 34%
Revenue from tea, one of Malawi’s major foreign exchange earners, stood at $12 million (K4.8 billion), a 33.7 percent drop from last year’s $18.1 million [K7.3 billion], despite the price being higher than the previous year.
This is according to figures from the Reserve Bank of Malawi (RBM) for the year to August 2013 contained in the latest monthly economic review.
Tea prices at the Limbe Auction market in Blantyre were recorded at $1.87 per kilogramme (kg), up from last year’s $1.68 per kg, according to the RBM report.
In August, tea sales amounted to 300 000 kg compared to 500 000 kg during the same period last year.
Cumulatively, volume of sales for the commodity was recorded at 6.4 million kgs, a 40.9 percent decline from 10.8 million kg sold in the prior year.
“The significant drop was on account of outstanding contractual sales obligations from last year,” reads the report in part.
As a result of the low volume of sales, total proceeds stood at $500 000 in the review month, lower than $900 000 realised in August 2012.
Last year, export revenue for the commodity peaked at K16 billion, a 50 percent jump from the previous year’s K10.7 billion.
But Tea Association of Malawi (Taml) chief executive officer Clement Thindwa said in dollar terms, the earnings had not gone up due to the devaluation of the kwacha, effected in May 2012.
The RBM devalued the local unit by 49 percent and subsequently floated it to be dictated by the forces of demand and supply.
Thindwa predicted that tea prices this year are expected to rise largely buoyed by sustained growth in world demand and weak output which is expected to create a deficit in the commodity’s global supply.
Kenya, Sri-Lanka, India and Malawi registered lower output in 2012 due to adverse weather condition and forecasts indicate the situation is not likely to improve given that tea plantation areas around the world remain the same while demand continues to rise.
