Rwanda's tea export earnings increased by 27 per cent to over $6 million in July, driven by better prices on the international market, the National Agriculture Exports Board (NAEB) monthly report indicates. 

Tea prices were up 55 per cent to $3.49 (about Rwf2,617.5)/kilo in July, up from 2.25 (about Rwf1,687.5)/kilo during the same period last year, according to the report.

This boosted the sector’s export revenues, with tea fetching $6.3 million (about Rwf4.7 billion) in July compared to $4.9 million (about Rwf3.7 billion) earned in July 2014. However, export volumes fell 18 per cent to 1.8 million kilogrammes during the month, down from 2.2 million kilogrammes in July last year.

NAEB aims to enhance the sector’s productivity by improving the value chain, a move that is expected to increase tea export receipts to $94.9 million by 2018, up from $65.7 million in 2013.

It also plans to distribute 43 million tea seedlings by the end of 2017, which could see Rwanda’s tea export earnings grow to $147 million over the period.

So far, over 13.7 million tea seedlings have been distributed and planted across the country.

Poor global prices hurt coffee earnings

Meanwhile, coffee export revenues declined 21 per cent year-on-year in July because of lower prices on the global market.

However, coffee export volumes were up by 2 per cent over the period.

The average export price for coffee declined 23 per cent, down to $3.24 per kilo during the month, from $4.23 in July 2014, according to the NAEB report.

This affected the country’s coffee export receipts, which declined to $6.1 million in July, from $7.7 million during the same period last year.

However, the country’s coffee export volumes rose from 1.8 million kilogrammes in July 2014 to 1.9 million kilogrammes this year.

According to Pie Ntwari, the head of communications at NAEB, the biggest contributor to the decline was price fluctuations on the global market.

He attributed it to a surge in supply, especially from South American countries, including Brazil, one of the main coffee producers.

Ntwari was, however, confident the country would achieve its annual targets.

"We want to focus on value addition because the country’s comparative advantage is not on volumes, but rather on quality,” he said in an interview yesterday.

Eric Rukwaya, the sales and marketing manager, Rwanda Farmers Coffee Company, said market trends have a direct impact on export earnings, noting that it is important for exporters to always seek market information to earn more benefits from the sector.

Global outlook

Globally, coffee export revenues declined by 2.8 per cent year-on-year. Statistics from the World Coffee Exports Centre indicate that Arabic coffee exports were 69.9 million bags in July, up from 68.2 million bags in 2014, while 43.3 million bags of robusta coffee were exported compared to 43.9 million last year.

Though coffee exports registered a marginal decline in July, sector experts believe the situation will normalise before the end of the year.

"Therefore, the decline in Rwanda’s coffee exports should not be viewed as a unique case,” they said. Rwanda looks to increase its export revenues b 28 per cent annually by 2018.

The country’s traditional exports - tea, coffee, pyrethrum, minerals, as well as hides and skins - accounted for 46.2 per cent of the total export earnings in the first half of the year compared to 49.2 per cent in 2014.

business@newtimes.co.rw