It could be a while until Uganda gets to sell its own tea to other countries from within.
A recent stakeholder engagement with the Uganda Exports Promotion Board (UEPB) under the theme, ‘Export opportunities and Competitiveness’ revealed that 70 per cent of tea is sold through an auction market.
According to the Uganda Tea Association, the country exports more than 60,000 tonnes of tea through the Mombasa Tea Auction. In March, UEPB revealed that it was crafting a plan to see Uganda market its own market directly.
Inscribed in Uganda’s second National Development Plan is a strategy to boost production of tea where linkages to direct markets is highlighted. A plan to launch an auction market that is envisaged to create more opportunities for farmers to market their produce at competitive prices was hatched.
However, this dream could take longer to realise. According to Mr Othieno Odoi, the senior planner in-charge of trade and tourism at the National Planning Authority (NPA), feasibility studies to determine whether the market would be viable are yet to be completed.
“Stakeholders at that time said we should try and see a possibility of having our own auction market in Uganda, and note that feasibility studies are yet to be completed,” he said
Uganda is, however, tied down by some challenges such as being landlocked which makes movement of produce complex.
On the other hand, he said, the improvement of infrastructure could address some of these constraints.
“As we improve our infrastructure and become more competitive in the medium and long term, then it might be more viable to have the auction market here,” he said.
Lack of an auction market hinders a lot of potential that the farmers in Uganda could leverage on to boost Uganda’s competitiveness in the sector.
Mr George Sekitoleko, the executive secretary Uganda Tea Association, says it is not feasible for Uganda to get a tea auction market because of the small volumes and poor quality produced.
“It is not feasible now because first, you have to have the volumes, high quality which we do not have,” he said.
Uganda, according to the Ministry of Trade, produces 61,629 metric tonnes of tea annually with 90 per cent of this exported through the Mombasa Tea Auction.
Likening Uganda to Kenya, Mr Sekitoleko said the latter produces nine times more than Uganda while Rwanda, despite the small volumes, has better quality than Uganda.
Packaging, a challenge Ugandan exporters suffer with is exacerbated by lack of an auction market.
Mr Odoi said Uganda’s produce once exported through Mombasa, because of lack of proper packaging, inherits Kenya as the origin in the export market. This has averted initiatives by government to market the country.
Mr Sekitoleko urged government to sign bilateral agreements with countries so that they can export their tea direct as opposed to moving through Mombasa, which rids Uganda of self-promotion.