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African growers and producers play a significant role in the global tea market; after all, Kenya currently ranks as the third highest tea-producing country in the world, and number one exporter. The deep, full, and rich flavor associated with African teas makes it appealing to drinkers who want a different taste profile than they’d get from Asian teas, which is why the continent’s tea market places a great deal of focus on international sales. But the rising profile of African teas doesn’t mean that the market is without challenges, and 2024 shows early signs of being a tricky year for growers and exporters.
African nations export about 90% of their tea.
“Africa continues to export in excess of 90% of its tea production,” says Joyce Maina, founder and director of Cambridge Tea Consultancy, an organization dedicated to international tea advisory and education. Producing and exporting tea has been a crucial element of Africa’s tea economy for years, proving lucrative for farmers, their families, and the tea industry on a generational level.
Brewing culture in Africa translates to low quantities sold domestically.
While residents of African nations certainly drink the tea grown in their countries, some regional tea drinking traditions result in low volumes sold locally, which aren’t enough to make a dent in the much larger export business and to raise prices domestically.
Using Kenya as an example, Maina tells us that “the way tea is brewed [in Kenya] means that very little tea is used, with the brew being mostly milk and water. If tea was brewed stronger with less milk, tonnage of tea used domestically would go up, with resultant strengthening of prices.”
Oversupply means reduced demand, and Maina says that she’s seen “a decline in tea prices. We are witnessing cases of teas selling below cost of production; for example, some Ugandan and Tanzania teas in the auction [are] fetching below $1/kg! The farmers cannot continue to produce at these prices.”
According to Anne Leiyan, senior tea buyer at Tata Consumer Products and Stansand (Africa), government legislation in African countries have also impacted the price potential of these products. “These interventions cause a distortion of the market and affect the overall [growth] of teas and the demand/prices,” explains Leiyan. An example is the introduction of the reserve prices for KTDA teas, which has seen the demand going down, hence an oversupply of teas with no home, as well as increased demand from other types within the region to replace this gap with better value teas.”
Overproduction and oversupply are also challenges.
Not only do African tea producers struggle with export challenges and a relatively low demand for their product in Africa itself, but recent weather conditions have resulted in “a serious state of oversupply,” says Maina. She attributes this to both the “favorable weather in 2023” and “leaf output expansion measures at many producer bases on the continent.”
In Kenya, at last there is effort to help address this issue of oversupply from the Kenyan government. Business Daily Africa reports that Kenya is in the process of repealing a 2021 policy setting a minimum price of $2.43/kilo for teas sold by the Kenya Tea Development Agency. As many producers now find themselves with an excess of tea, that reserve price “has resulted in buyers shunning tea that they feel is highly priced.” Removing the minimum price could help producers sell more tea at auction.
In spite of the overproduction and the bureaucratic issues impacting the tea market, Maina tells us that perception isn’t keeping up with reality. “The idea that producing more tea is good and that increasing yield is a positive move is still being touted everywhere. The thought that maybe less tea of better quality is the way to go to improve both prices and sustainable business isn’t being actively pushed. Many farmers rely on tea for their livelihoods, and there is not a ready alternative to switch to. Family land is complicated to change things on, meaning that changes cannot be implemented overnight,” she says by way of context.
Awareness of African tea is improving worldwide.
A positive piece of news for this export-dominant industry? More and more nations have gotten wise to the accessibility and unique flavors of African teas and are actively participating in the African tea market. “It is a triumph that new markets are being reached by African teas. Non-traditional export markets like Uzbekistan, Spain, Austria, South Korea, Vietnam, Bangladesh, El Salvador, Romania, and African countries including South Sudan, Djibouti, Angola and Gabon continue to grow,” Maina tells us. Reaching new international markets will help keep African tea producers afloat while they continue to grow their profiles both abroad and within Africa.
Innovative initiatives in sustainability, tech, and specialty teas are the future of this market.
So what can the African tea market anticipate in 2024 and beyond? The difficulties caused by oversaturation will be a major force to reckon with for the foreseeable future, but Maina and Leiyan believe that tea producers and sellers can take active steps to improve their prospects.
Maina thinks that many producers will benefit from a generational shift: “As younger generations take over family farms, a new type of tea farmer is emerging. He/she is well educated, well-travelled, tech savvy, and in tune with global developments. We must not underestimate the impact this will have on tea farming as an industry – expect faster changes, innovation, and modern techniques of processing and marketing. This new farmer generation will have a much stronger voice in the value chain.”
Leiyan agrees that technology will continue to grow its presence within the African tea industry, saying that “mechanization (in harvesting tea) has greatly increased and will continue being embraced.”
“The way sustainability initiatives play out will also change,” Maina points out. “While Kenya, and Africa generally, are early adopters and indeed most gardens bear some sort of certification, there is a renewed requirement to justify the costs versus return equation as many farmers do not see any difference in price paid for their certified teas.”
Finally, both Maina and Leiyan say that tea producers in Africa need to diversify their product if they hope to stay competitive. Luckily, African tea growers are already producing crops that diverge from the market norms with excellent results. More and more are growing botanical herbs, which are being drunk locally too. “We are seeing increased consumption of herbal and functional teas, and it is now common to see a spread of brands and blend types in this category, with some local brands succeeding to convert the more affluent drinkers, and this trend is set to grow,” Maina says.
Leiyan also mentions that “most overseas tea consumers do not know the teas they consume come from Africa because little has been done to market tea in these countries with the mark of origin being at the forefront.”
If importers took a more vested interest in specifying the African provenance of the teas they’re selling, it would increase the value of this product. Another way to grow the profile of African teas is to embrace the specialty teas being produced throughout the continent. “We can expect to see more specialty tea produced out of Africa – surprisingly good white, green, and even oolong teas that can stand up to any other specialty teas from more traditional origins,” says Maina.
As a result of years of oversupply and low prices, some farmers will unfortunately find it necessary to go out of business. Factors like poor electrical connections, high power costs, rising fertilizer prices, and labor expenses have also impacted African tea farms; according to National News newspaper Uganda, 9 tea factories in Uganda–”including four which are owned by smallholder tea farmers’ associations”–have been forced to close. Also, Ugandan tea harvesters “don’t adhere to harvesting and plucking standards because all they care about is harvesting many kilos so they can be paid more,” says Uganda Tea Association chairperson Gregory Mugabe. This causes a decrease in the quality of the harvested tea, which “makes it less attractive to international buyers.”
Maina believes that a greater emphasis on quality would benefit the market as a whole, telling us that “from the fallout of producers who cannot continue, the remaining players would more than likely have greater focus on quality rather than volumes – a mindset change that is long overdue!”
Changes that would remove price levels, encourage quality, diversify the market, and result in additional crops growth will join with innovations in technology to help shape the future of the African tea market – and they need to happen sooner rather than later.
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