At the end of a five-year effort, Tanzania made history by holding its first-ever tea auction in Dar es Salaam.
It is anticipated that this move will drastically increase farmer incomes in the nation and change the nature of the East African tea trade.
Tanzania, one of the major producers of high-quality tea in the region, is strategically taking advantage of the reduced cost of logistics with other East African tea growers.
The nation intends to trade roughly 65,000 tonnes of tea every week, which would result in the Mombasa Tea Auction losing more than 25% of its total volume.
Currently, the world’s largest tea exporter, Mombasa Tea Auction, handles over 247,000 tonnes of tea per week. Tanzania’s tea auction could challenge this hegemony and present a serious obstacle to Mombasa’s tea trade.
But there’s more to this growth than just rivalry. It signifies a more significant change in the tea market in East Africa, bringing with it new prospects for both traders and farmers.
The auction offers a direct marketplace for Tanzanian farmers to sell their produce, maybe resulting in higher prices and better living conditions.
Additionally, the sale can encourage more expansion and funding for Tanzania’s tea industry. It might draw in more buyers and dealers, increasing competition and spurring innovation in the production and processing of tea.
Tanzania produced about 24,077 tons of tea in the 2020–21 year.
The production fell little to 23,202 tons in 2021–2022. and decreased significantly to 7,875 tons in 2022–2023.
Compared to earnings of TSh104 billion in 2019, the Tanzania Trade Development Authority (TanTrade) reported a loss of TSh30.1 billion in 2020.
Kenya, with a 44% market share ($13.4 million), the United Kingdom, with a 19.3% share at $5.81 million, South Africa, with a 9.63% share at $2.89 million, Pakistan, with a 4.62% share ($1.38 million), and Russia, with a 2.88% share ($867,000) are the top tea-consuming countries in Tanzania.
Although Tanzania’s inaugural tea auction presents obstacles for the Mombasa Tea Auction, it also portends well for Tanzania’s tea sector and its growers. It will be interesting to watch how industry participants adapt and innovate to survive in this shifting terrain as the dynamics of the East African tea trade continue to change.