New tea strategy calls for value addition

A new tea strategy that recommends that Rwanda concentrates on high quality tea, and puts emphasis on branding and packaging, is likely to result in price declines for bulk black tea. This is indicated in a review paper of the March 2009 of the Ministry of Trade and Industry. The paper says that the “Rwandan Tea Strategy 2009-2012” is built around adding value. As explained in the report, global supply is leading to a likely long-term price decline for bulk black tea, while demand and prices within the high quality and niche tea markets are increasing, a situation that calls for a new approach for Rwanda producers. “Therefore, projected trends in the global tea market indicate that Rwanda cannot sustain rapid growth in export revenues by continuing its focus on bulk black tea supply,” the ministry document said. Also noted is that carrying out value addition plus branding and packaging with improved yields could increase exports to $80 million by 2012. Apart from the tourism and mineral sectors, export revenues from the tea sector have also, previously, surpassed targets. Actual export revenues from tea in 2008 were $45 million compared to the targeted $40 million. The country’s tea authority – Ocir-Thé – puts this year’s target at $54 million (Rwf 30.6 billion). Ocir-Thé records also indicate that tea production recently increased by 28 percent – from 1.48 million kilograms in February to 1.89 million kilograms in March. The Ministry report notes that last year’s tea export revenues, which represent export volumes of nearly 20,000 tonnes, increased significantly due to higher international prices. Also highlighted is that last year’s high price fetch, the highest since 1991, was mostly related to a shortfall in the Kenyan tea supply following a fall in production due to the latter’s post election effect on the local tea sector. Rwandan tea’s revenue growth is also primarily attributed to the improved application of fertilizers and better farming practices. Of late, Ocir-Thé says it has planted more 3,000 hectares of tea, in addition to the current estimated 1,200 hectares , to increase production of dried tea to 35,000 metric tones by 2012. Ocir-Thé also wants to build five extra factories by 2012. Ends