Wednesday July 17 2013

Tea, tobacco take hit from Egypt’s unrest

Tea, tobacco take hit from Egypt’s unrest

Most tea leaves are produced on about 25,000 hectares of land and sold at Kenya’s Mombasa tea auction. File Photo. 

By Ismail Musa Ladu

The political instability in Egypt has taken a toll on the prices of tea, coffee and tobacco, the government and industry players have said.

This will be the second time in as many years, those cash crops are taking a beating as a result of political unrests—in the North African country.

With the continued uncertainty in Egypt, the marketing manager of Mpanga Growers Tea Factory, Mr Christopher Muhanguzi, said prices of its tea have been dropping nearly every week by an average of about 20-40 cents.

He said: “Because of lack of one of our major buyer—Egypt, at the Mombasa auction, our tea is now being sold at $1.8 [Shs4,675] instead of $2.2 [Shs5,713] per Kilogramme.”

He continued: “As long Egypt companies do not participate in the auctions, then our product is bound to fetch low prices.

“We export weekly nearly 70 tonnes of tea, which means that it is time we got new markets in the Middle East countries.”

However, it is not only Uganda that is suffering as a result of the political unrest in Egypt. Other regional countries like Kenya have witnessed fluctuations at the Mombasa Tea Auction, with the average of all teas from the region sold at the auction dropping to $2.37 (Shs6,155) per kilogramme of tea from $2.99 (Shs7,765) per kilogramme.

In an interview with the Daily Monitor yesterday, Mr Silver Ojakol, the commissioner of external trade, said the unrest in Egypt will affect coffee companies whose raw materials are processed there before being packaged and sold as finished goods to the international market.

Export Promotion Board Executive Director Florence Kata said tobacco players could count some losses as it is one of the key ingredients of shisha also known as water-pipe smoking.

Ms Kata also says a reasonable amount of pharmaceutical products are imported from Egypt.