Meikles Limited has bemoaned the impact of increased tea production by players in East Africa as this has negatively affected international tea prices prompting reduced revenue for local producers.
Presenting the financial results for the year ended March 31, 2020, the group’s chairperson, John Moxon said tea prices were affected by increased production.
“International tea prices weakened by 14% from US$ 1.64 per kilogramme in the prior year to US$ 1.44 per kilogramme in the year ended 31 March 2020 due to increased supply of tea by Kenya which has not been matched by corresponding with world demand,” he said.
The East African nation is the biggest exporter of black tea in the world and records indicate that in 2019 alone 458.85 million kilogrammes of the crop were produced in that country.
Latest market projections indicate that the global tea market was equal to US$113.46 billion in 2014.
Until 2024, the tea market in the world is forecast to reach US$ 235.75 billion in retail prices, thus increasing at a rate of 6.8% per annum for the period 2019-2024.
This is a decrease, compared to the growth of about 8.7% per year, registered in 2014-2018.
This means, going forward, Zimbabwe tea farmers need to implement robust marketing strategies to keep afloat.
In line with this, the Meikles Limited Group has sought permission which was recently granted by the Reserve Bank of Zimbabwe (RBZ) to invest towards increasing promotional expenditure in neighbouring South Africa.
“This will help to support market penetration efforts to grow packed tea exports,” Moxon said.
Zimbabwe exports of tea to South Africa was US$11.91 million during 2019, according to the United Nations COMTRADE database on international trade.
The commodity’s export has a huge potential in the neighbouring country which has seen exports growing from just above 6 million tonnes in 2009 to 12 million tonnes as of last year, according to COMTRADE.