Tanzania has introduced its inaugural online Tea Auction, which has opened up opportunities for regional farmers to access global tea markets.
The development poses a significant challenge to the Mombasa Tea Auction, as Tanzania emerges as a formidable competitor in the industry, analysts told The Standard yesterday.
Tanzania’s digital auction marks its first direct entry into the global tea market, providing it and regional farmers with a new platform to compete with the Mombasa Tea Auction.
Tanzanian officials said this week that in addition to reducing expenses for traders who previously had to travel to Mombasa, the upcoming auction, is expected to guarantee Tanzanian farmers “a just and equitable agreement.”
They added the motivation for organising the auction is to reduce transportation expenses to Mombasa and offer improved prices.
The commencement of the auction would exert significant strain on Kenya as a centre for tea, attracting significant players from the nation and nearby Rwanda, Burundi, and Uganda - reducing the dominance of the Mombasa auction, analysts told The Standard.
Kenya is the world’s leading exporter of black tea and the crop is a major foreign exchange earner for the country’s economy, together with horticultural products and tourism.
Most of the tea offered at the Mombasa auction is from Kenya, but tea from Uganda, Tanzania, Rwanda, Burundi and other regional producers is also sold. Tanzanian authorities this week expressed their aspirations for the Dares Salaam new tea auction to become a central hub for other regional countries.
According to local media, the director general of the Tea Board of Tanzania Mary Kipeja, stated that the tea auction would establish the country as a central hub for neighbouring tea-producing countries to trade their goods.
“Apart from minimising market costs, the tea auction is going to be a part and parcel of the implementation of the local content agenda, therefore empowering Tanzanians economically,” she was quoted saying. “The auction is going to significantly change the income of large and small scale growers because costs incurred for tea transporting to Mombasa in neighbouring Kenya will now be used for strengthening and improving productivity.”
Ten processors have reportedly signed contracts with brokers, according to her statement and seven others are being discussed before finalising the agreement documents.