What Tanzania’s first tea auction means

Dar es Salaam. It will be a historic milestone today when Tanzania holds its first ever tea auction.

The Citizen has learnt that apart from slashing costs borne by traders, who had to travel all the way to the Kenyan port city of Mombasa where Tanzanian tea was previously auctioned, the Dar es Salaam auction will also ensure that Tanzanian farmers get a fair deal.

Tanzania Tea Board (TTB) director general Mary Kipeja confirmed that the inaugural auction would take place today after it was postponed last December.

“We have engaged all the relevant stakeholders, including big processing factories, buyers and brokers. These capacity-building initiatives were meant to ensure that all players understand market regulations and dynamics and how the digital system will operate,” she said.

The launch of the Dar es Salaam would also ensure full control and transparency on pricing, Ms Kipeja added.

“It will cut operating costs by up to50 percent for traders who used to travel all the way to the Mombasa auction.”

Tabling his docket's 2023/24 budget in Parliament in Dodoma earlier in the year, Agriculture minister Hussein Bashe said the government, through TTB, had finalised the relevant market regulations and conducted an inspection of the privately-owned warehouse designated for auction activities.

“The Tanzania Mercantile Exchange (TMX) has completed the tea market system and TTB is currently registering foreign tea buyers who will participate in the tea auction,” Mr Bashe told Parliament.

Tanzania had harvested 8,047 tonnes of tea by the time the Agriculture budget was presented in Parliament in May.

Some 7,875 tonnes of tea, valued at $12.23 million, were exported during the 2022/23 financial year.

The coming to life of the local auction will also improve the welfare of smallholder tea farmers, who sell their produce to big tea-processing factories, according to the Tanzania Smallholder Tea Development Agency (TSHTDA).

TSHTDA director general Theophord Ndunguru said smallholders would be participating indirectly because they supply their harvests to processors, who are the ones who negotiate at the auction.

“Because it’s happening locally, big factories’ operating costs will also go down significantly and this will translate into better prices for small-scale farmers, who have for so many years felt the pinch of low prices,” he said.

Mr Ndunguru added that the new era of independent tea auctions raised optimism that they would pave the way for a prosperous and sustainable future for Tanzania's tea industry.

According to the 2019/20 National Sample Census of Agriculture, 18,661 households engaged in tea farming in the country.

However, tea was grown in only six mainland Tanzania regions on 15,119 hectares, with smallholder and large-scale farming comprising 7,246 and 7,873 hectares, respectively.