Rwanda is banking on the quality of tea it produces as the one value proposition to help it weather the falling global prices.
The first eight months of this year saw a sharp drop in tea prices on the international market, but the country performed well at auctions.
According to the latest data from the National Agriculture Export Board (NAEB), the country generated more than Rwf90 billion ($93 million) in 2019/2020, a 12 per cent growth in revenue from Rwf80billion ($83 million) recorded in 2018/2019.
“This was driven by a combination of quality and good prices at auctions. We focused on ensuring we produce the best quality and it paid off,” said Cynthia Uwacu, the export market development and innovation manager at NAEB.
Despite the high numbers, the demand on the international market has not yet fully recovered from the effects of Covid-19.
Export volumes increased by seven per cent from more than 30,500 tonnes in 2018/2019 to more than 32,600 tonnes in 2019/2020,.
Last year, the government came up with a policy in which farmers earn at least 50 per cent of the price that a kilogramme of processed tea is sold on the international market, an incentive that is boosting production.
Tea exporters are however still reeling from falling prices. Bela Nyirahuku, the sales and marketing manager at Rwanda Mountain Tea, said tea prices are irregular. “The market is responding by bidding at lower rates and buying sparingly, therefore prices are low and tea stocks are comparatively high,” she said.
Rwanda exported up to 9,317 tonnes of processed tea worth Rwf25 billion ($27.6 million) between January and March, up from Rwf20 billion ($21.8 million) in the same period last year.
Prices started dropping in the second quarter as key buyers closed shop due to the restrictions imposed on movement of goods and services due to the Covid-19 pandemic.
Rwanda is exploring new markets including the Middle East and Russia. The country will maximise the promotional deal signed with French football club PSG; part of the deal is to sell and exhibit Rwandan tea during matches.