An Overview of Tea Production for the Financial Year 2015/2016 Compared to the Previous Season

TEA BOARD OF TANZANIA

AN OVERVIEW OF TEA PRODUCTION FOR THE FINANCIAL YEAR 2015/2016 COMPARED TO THE PREVIOUS SEASON

1.0. NATIONAL MADE TEA PRODUCTION

Made tea production for the financial year of 2015/2016 decreased by 3,121,141 kg equivalent to 8.7 percent, from 35,749,769 kg recorded in 2015/2015 to 32,628,628 kg produced in 2014/2015 (Table1). Main reasons for outstanding decrease in production werethe prolonged dry spell particularly in Rungwe District and unreliable rainfall distribution in Mufindi District which are major tea producing Districts in the country.

1.1. Monthly Tea Production Trend

Monthly made tea production trend (Table 1) shows clearly that production was not substantially low in all months from July to November in 2015 and in April and June 2016. Consequently, total production of made tea for the respective financial year decreased by 8.7%. This was mainly caused by prolonged drought in those months in most tea growing areas.

Table 1: Monthly Tea Production Trend

Month / July 2015 to June 2016 / July 2014 to June 2015 / Difference / % Difference
Jul / 1,281,205 / 1,526,933 / (245,728) / (16.1)
Aug / 856,353 / 1,410,840 / (554,487) / (39.3)
Sep / 1,088,292 / 2,046,787 / (958,495) / (46.8)
Oct / 2,476,834 / 3,773,399 / (1,296,565) / (34.4)
Nov / 2,792,586 / 4,151,233 / (1,358,647) / (32.7)
Dec / 3,766,448 / 2,952,578 / 813,870 / 27.6
Jan / 3,818,953 / 3,801,476 / 17,477 / 0.5
Feb / 3,676,969 / 3,427,907 / 249,062 / 7.3
Mar / 4,323,676 / 3,637,915 / 685,761 / 18.9
Apr / 3,734,002 / 3,955,759 / (221,757) / (5.6)
May / 3,210,693 / 3,139,913 / 70,780 / 2.3
Jun / 1,602,617 / 1,925,029 / (322,412) / (16.7)
Total / 32,628,628 / 35,749,769 / (3,121,141) / (8.7)

1.2.Trend Production by Zone

As shown in Table 2, tea production in Northern zone stood at 5,921,869 kg in 2015/2016 as compared to 5,819,069 kg produced in 2014/2015 a slight increase of 102,800 kg equivalent to 1.8%. Tea production in Southern zone was 26,706,759 kg in 2015/2016 as compared to 29,930,700 kg produced in 2014/2015 representing a significant decrease of 3,121,141 kg equivalent to 8.7%. The decrease was attributed by low and unreliable rains in Rungwe and Mufindi Districts.

Southern Zone’s contribution to the total production was 82% and 84% as compared to 18% and 16% contribution in production of the Northern zone in 2015/2016 and 2014/2015 respectively.

Table2: Made tea production by tea growing zones

Season/Zone / Northern Zone / Southern Zone / Total
July 2015-June 2016 / 5,921,869 / 26,706,759 / 32,628,628
July 2014-June 2015 / 5,819,069 / 29,930,700 / 35,749,769
Variance / 102,800 / (3,223,941) / (3,121,141)
Variance % / 1.8 / (10.8) / (8.7)
Contribution % (2015/2016) / 18 / 82 / 100
Contribution % (2014/2015) / 16 / 84 / 100

1.3.Tea Production by sector

Estate tea subsector produced 22,815,677 kg in 2015/2016 as compared to 23,830,273 kg produced in 2014/2015decrease of 1,014,596 kg equivalent to 4.3%. On the other hand, Smallholder tea subsector produced 9,812,951 kg in 2015/2015 as compared to 11,919,496 kg produced in 2014/2015 a significant decrease of 2,106,545 kg equivalent to 17.7% (Table 3) Main reason for decrease in tea production being………………………….

Contribution of Estates’ subsector to the total production was 70% and 67% as compared to the contribution of 30% and 33% of smallholder tea subsector in 2015/2016 and 2014/2015 respectively.

Table 3: Made tea production by sector

Season / Estate / Smallholder / Total
July 2015-June 2016 / 22,815,677 / 9,812,951 / 32,628,628
July 2014-June 2015 / 23,830,273 / 11,919,496 / 35,749,769
Variance / (1,014,596) / (2,106,545) / (3,121,141)
Variance % / (4.3) / (17.7) / (8.7)
Contribution % (2015/2016) / 70 / 30 / 100
Contribution % (2014/2015) / 67 / 33 / 100

1.4.Made Tea Production by Districts

During the period under review, tea production by districts (Table 4) showed that the major tea producing districts of Mufindi, Njombe and Rungwe recorded decease in production. Tea production significantly decreased in Rungwe and Mufindi Districts by 1,858,421 Kgs (26.2%) and 1,133,495 Kgs (7.3%) respectively. Reasons for decreased production in the districts are as stated above.

Table1 4: Made tea production by Districts

District / July 2015-June 2016 / July 2014-June 2015 / Difference / %Difference
Rungwe / 5,224,777 / 7,083,198 / (1,858,421) / (26.2)
Njombe / 7,046,038 / 7,278,063 / (232,025) / (3.2)
Mufindi / 14,435,944 / 15,569,439 / (1,133,495) / (7.3)
Korogwe / 1,905,016 / 2,107,106 / (202,090) / (9.6)
Muheza / 3,156,977 / 2,671,526 / 485,451 / 18.2
Lushoto / 332,415 / 360,887 / (28,472) / (7.9)
Bukoba / 527,461 / 679,550 / (152,089) / (22.4)
Tarime / - / - / - / -
Total / 32,628,628 / 35,749,769 / (3,121,141) / (8.7)

1.5. Made Production by factory

Tea production by factories (Table 5) shows that many tea processing factories recorded low tea production in 2015/2016 financial year as compared to the previous year. This is attributable to low supply of green leaf from estates and smallholder tea farms as a result of un-conducive weather conditions.

Table 5: Total Made Production by factory

Factories / July 2015-June 2016 / July 2014-June 2015 / Difference / %Difference
Chivanje / 1,511,037 / 2,039,342 / (528,305) / (25.9)
Katumba / 3,713,740 / 5,043,856 / (1,330,116) / (26.4)
Lupembe / 158,836 / - / 158,836
Kibena / 3,533,753 / 3,477,650 / 56,103 / 1.6
Luponde / 1,485,583 / 1,603,290 / (117,707) / (7.3)
Ikanga / 1,867,866 / 2,197,123 / (329,257) / (15.0)
Itona / 3,800,759 / 4,141,010 / (340,251) / (8.2)
Lugoda / 4,141,520 / 2,242,786 / 1,898,734 / 84.7
Kibwele / 4,274,185 / 4,064,541 / 209,644 / 5.2
Kilima / 2,091,731 / 4,940,297 / (2,848,566) / (57.7)
Kiganga / 127,749 / 180,805 / (53,056) / (29.3)
Arc Mountain / 598,602 / 747,215 / (148,613) / (19.9)
Dindira / 1,306,414 / 1,359,891 / (53,477) / (3.9)
Kwamkoro / 1,948,061 / 749,998 / 1,198,063 / 159.7
Bulwa / 1,007,976 / 1,793,110 / (785,134) / (43.8)
Marvera / 200,940 / 128,418 / 72,522 / 56.5
Herkulu / 332,415 / 360,887 / (28,472) / (7.9)
Bukoba / 527,461 / 679,550 / (152,089) / (22.4)
Total / 32,628,628 / 35,749,769 / (3,121,141) / (8.7)

NB: Lupembe factory was reopened this financial year fowling ruling of the long standing court case.

1.6.Production of made tea using estate’s leaf

Production of tea using green leaf sourced from estates farms (Table 6) shows that there were low supply of green leaf from many estate farms. The lowest supply of green leaf was from Katumba factory which recorded the lowest production of made tea by 42.7%. Good supply of green leaf from estate farms to factories was observed in some factories leading to increase in production of made tea. They include; Dindira, Kwamkoro, Marvera, and Herkulu factories.

Table 6: Production of made tea using estate’s leaf

Factories / July 2015-June 2016 / July 2014-June 2015 / Difference / %Difference
Chivanje / 1,086,181 / 1,290,724 / (204,543) / (15.8)
Katumba / 474,195 / 826,902 / (352,707) / (42.7)
Lupembe / 21,407 / - / 21,407 / -
Kibena / 3,103,733 / 3,092,901 / 10,832 / 0.4
Luponde / 1,347,786 / 1,520,592 / (172,806) / (11.4)
Ikanga / - / - / - / -
Itona / 2,884,894 / 3,133,778 / (248,884) / (7.9)
Lugoda / 3,580,795 / 3,211,227 / 369,568 / 11.5
Kibwele / 3,897,843 / 4,420,579 / (522,736) / (11.8)
Kilima / 1,708,671 / 2,008,659 / (299,988) / (14.9)
Kiganga / 89,803 / 94,294 / (4,491) / (4.8)
Arc Mountain / 455,187 / 538,892 / (83,705) / (15.5)
Dindira / 564,680 / 495,107 / 69,573 / 14.1
Kwamkoro / 1,938,694 / 1,696,356 / 242,338 / 14.3
Bulwa / 943,257 / 749,998 / 193,259 / 25.8
Marvera / 177,504 / 112,456 / 65,048 / 57.8
Herkulu / 126,133 / 107,577 / 18,556 / 17.2
Bukoba / 414,914 / 530,231 / (115,317) / (21.7)
Total / 22,815,677 / 23,830,273 / (1,014,596) / (4.3)

NB: Ikanga factory rely entirely on green leaf from smallholder tea farms. Lupembe factory was reopened this financial year fowling ruling of the long standing court case.

1.7.Production of made tea using Smallholders’ leaf

Production of tea using green leaf sourced from Smallholders’ farms as depicted in Table 7, again shows low supply of green from many smallholders’ farms. This led to overall decrease of made tea by 17.7%.

Table 7: Production of made tea using Smallholders’ leaf

Factories / July 2015-June 2016 / July 2014-June 2015 / Difference / %Difference
Chivanje / 424,856 / 748,618 / (323,762) / (43.2)
Katumba / 3,239,545 / 4,216,954 / (977,409) / (23.2)
Lupembe / 137,429 / - / 137,429 / -
Kibena / 430,020 / 384,749 / 45,271 / 11.8
Luponde / 137,797 / 82,698 / 55,099 / 66.6
Ikanga / 1,867,866 / 2,197,123 / (329,257) / (15.0)
Itona / 915,865 / 1,007,232 / (91,367) / (9.1)
Lugoda / 560,725 / 853,314 / (292,589) / (34.3)
Kibwele / 376,342 / 519,718 / (143,376) / (27.6)
Kilima / 383,060 / 234,127 / 148,933 / 63.6
Kiganga / 37,946 / 86,511 / (48,565) / (56.1)
Arc Mountain / 143,415 / 208,323 / (64,908) / (31.2)
Dindira / 741,734 / 864,784 / (123,050) / (14.2)
Kwamkoro / 74,086 / 96,754 / (22,668) / (23.4)
Bulwa / - / - / - / -
Marvera / 23,436 / 15,962 / 7,474 / 46.8
Herkulu / 206,282 / 253,310 / (47,028) / (18.6)
Bukoba / 112,547 / 149,319 / (36,772) / (24.6)
Total / 9,812,951 / 11,919,496 / (2,106,545) / (17.7)

NB: No supply of smallholders’ green leaf to Bulwa factory

2.0.TEA MARKETING

2.1.Export Sales by Country of Destination

Tea exported for the financial year 2015/2016(Table 8) was30,057,921.33 kg which earned US $ 51.7 million as compared to 29,570,391.00 kg which earned US $ 46.2 million in 2014/2015. This shows that in 2015/2016 there was an increase in both the amount of tea exported and income earned by 1.65% and 12.2% respectively.

The average price per kilogram of exported tea increased from US $ 1.56 in 2014/2015 to US $ 1.72 in 2015/2015.

Table 8: Export Sales by Country of Destination

Season / Export (kgs) / Export Earnings (USD) / Average Price (USD/KG)
July 2015-June 2016 / 30,057,921.33 / 51,794,854.27 / 1.72
July 2014-June 2015 / 29,570,391.00 / 46,177,538.72 / 1.56
Variance / 487,530.33 / 5,617,315.55 / 0.16
Variance % / 1.65 / 12.16 / 10.35

2.2.Made tea sales through Mombasa Auction

The amount of made tea sold through Mombasa Auction in 2054/2016(Table 9) was 3,850 tons as compared to 5,654 tons sold in 2014/2015 being a significant decrease of 1,904 equivalents to 31.9%. Better tea prices for tea exported directly to overseas destination drove many factories to capitalize in that market.

The average price per kilogram of sold tea at Mombasa Auction decreased from US $ 1.57 in obtained in 2014/2015 to US $ 1.28 in 2015/2016.

Table 9: Made tea Sales through Mombasa Auction

Season / Quantities (Tons) / Average Price (USD/KG)
July 2015-June 2016 / 3,850 / 1.28
July 2014-June 2015 / 5,654 / 1.57
Variance / (1,804) / (0.3)
Variance % / (31.9) / (18.5)

2.3.Blended and Packed Tea Sales

Blended and packed tea during the financial year 2015/2016 stood at 4,466,191 kg as compared to 5,521,557 produced in 2014/2015. This shows that there was a decrease in the amount of blended and packed tea by 1,055,366 kg equivalent to 19.1% which might have been attributed to decrease of made tea production.

The average price per kilogram of blended and packeted tea sold in the local market increased from TZS 7,237 in 2014/2015 to TZS 7,750 in 2015/2016. This is an increase of TZS 513 per kg equivalent to 7.1%. Introduction of VAT to blended and packed tea sales might be one of the contributing factors for increase in price.

Table 10: Blended and Packed Tea Sales

Season / Quantities (kgs) / Total Earnings (Tshs) / Average Price (TZS/Kg)
July 2015-June 2016 / 4,466,191 / 34,613,872,466 / 7,750
July 2014-June 2015 / 5,521,557 / 39,960,457,817 / 7,237
Variance / (1,055,366) / (5,346,585,351) / 513
Variance % / (19.1) / (13.4) / 7.1