What today's first tea auction in Dar means for the country

Dar es Salaam. Tanzania today holds its first-ever tea auction.

The event at Millennium Towers in Dar es Salaam is expected to transform the country’s tea sub-sector.

The auction, which is expected to trade 65 tonnes of the commercial crop, will play a pivotal role in increasing utilisation and operationalisation of the Dar es Salaam and Tanga ports, as well as enhancing transparency in tea trading.

The auction will be graced by Agriculture permanent secretary Gerald Mweli and will also provide assurance and confidence to players on issues of fairness in the auctioning and pricing.

Tea Board of Tanzania (TBT) director general Mary Kipeja told The Citizen that the tea auction would make Tanzania a regional hub where neighbouring tea producing countries would be trading their produce.

“Apart from minimising market costs, the tea auction is going to be a part and parcel of the implementation of the local content agenda, therefore empowering Tanzanians economically,” she said.

“Players in the value chain including tea buyers, brokers, warehouse operators, and transporters among others will benefit from the auction. More Tanzanians will also be enticed with interests in tea cultivation and management in order to increase production and quality of the produce,” she added.

Ms Kipeja said introduction of tea auction in Tanzania would reduce transportation by 50 percent costs previously incurred for transporting the produce to Mombasa for auction, therefore providing relief to players and specifically farmers.

She said through the Dar es Salaam and Tanga Ports that would be used for transportation of auctioned tea, the government will increase revenue collection and create more jobs for Tanzanians.

“We are thankful to President Samia Suluhu Hassan who has been behind this initiative and the general transformation of the country’s agriculture. Specifically, the ministry of Agriculture is commended for ensuring the sector’s prosperity,” Ms Kipeja said.

“The auction is going to significantly change the income of large and small scale growers because costs incurred for tea transporting to Mombasa in neighbouring Kenya will now be used for strengthening and improving productivity.”

She said ten processors have signed contracts with brokers and that seven others were still under discussion before inking the agreement documents.

Furthermore, she said nine registered buyers were expected to participate in the auction which was conducted following the successful mock auctions participated by key players including processors, warehouse operators, brokers and buyers.

Tabling his docket’s 2023/24 budget in Dodoma, Agriculture minister Hussein Bashe outlined the country’s tea production trend in recent years in tonnes and their respective years of harvest in brackets as; 23,187 (2019/20); 24,077 (2020/21); 23,202 (2021/22) and 7,875 (2022/23).

He respectively disclosed revenue collected and respective years in brackets as; $34.248 million (2019/20); $39.011 million (2020/21); $34.589 million (2021/22) and $12.24 million (2022/23).

Speaking in 2021, Mr Bashe told Parliament that the ministry was finalising preparation of the 10 Year Tea Industry Strategy (2021/22-2029/30) aimed at improving the quantity and quality of the produce as well as supervising research development.

The strategy also aims at enhancing institutional capacity, improving efficiency in the provision of extension services and creation of an enabling environment in order to attract investors in the sector.

“The strategy aims at increasing production from 33,000 tonnes of dry tea to 90,000 tonnes by 2029/30 through the use of modern technology in the whole production chain and strengthening the marketing system,” said Mr Bashe when serving as Agriculture deputy minister before his elevation on January 8, 2022.

Statistics show that the crop has been attracting an average of $60 million in foreign exchange a year and creating 50,000 direct jobs annually.