Tea Production in Africa: Tangible Ambitions for Growth
Last August, the former President of Nigeria, Olusegun Obasanjo, announced that the Mambila plateau, in the state of Taraba, could become a future major tea-producing hub in Africa. As a result, Nigeria would feature amongst the African tea-producing states. Kenya is the leading country: in 2015, Kenya accounted for a 61% share in terms of total African tea production; Uganda (8%), Burundi (6%), Malawi (6%) and Tanzania (5%) lagged some way behind this figure. From 2008-2015, Burundi (+4%), Uganda (+3%), and Kenya (+2%), were the leader-countries in Africa with regard to the average annual rate of growth in terms of tea production.
Despite the increase in tea output in Africa, Asia heads the leader table on the global market: according to IndexBox estimates, Asia's share in terms of global production and consumption totaled 84% and 77% respectively. Moreover, should the global per capita consumption of tea in 2015 be taken as 0.7 kg/head overall, then this figure for Asia amounted to 1.2 kg/head.
Asia's dominance of the tea market is historical: tea was the traditional drink in both China and India, and in other countries within the region, long before it became popular in other parts of the world. On the "Dark Continent", the tea plant was introduced in the 19th Century by the first European settlers, who were based where the modern-day South African countries are now (Zimbabwe, Republic of South Africa). Industrial tea supplies from Africa appeared in the 20th Century.
Today, Africa is the ? 2 tea producer in the world: in 2015, Africa's share accounted for 13% of total global output. The African tea market has considerable growth potential for several reasons. The lower figure of per capita consumption (0.6 kg/head), against the rest of Asia, provides evidence of this. The growth in tea consumption also indicates partial market saturation: in China, it decreased at an average annual rate of -6.3%; this was the contrary in South Africa, however, rising on average by +5.2% a year; this was also the case for Algeria (+7.3%), Zimbabwe (+8.8%) and Estonia (+58.1%).
Cost-effective manpower and favourable tea-growing conditions - tropical and sub-tropical mountain forests (Malawi, Zimbabwe, Burundi, Ruanda, Uganda) and elevated plains (the Mambila plateau in Nigeria has an area of 50,000 ha) - can also be cited as being propitious factors driving the tea market's development. Tea's popularity in North African countries with a predominantly Muslim population, which are also located near trade routes (Morocco, Mauritania, Egypt and Tunisia) appears as yet another factor contributing to the market's potential growth.
The experts at IndexBox have grouped Africa's tea-producing countries according to export figures. The position of the countries' four categories can be displayed using a graph figure, where:
? Axis ? represents the average annual growth of exports from 2008-2015;
? Axis Y - the exports share in terms of total production;
? The circle size - total tea production.
The division into quadrants was obtained using two dividing lines - horizontal and vertical: the first reflects the exports share in terms of total production Africa-wide (62%), and the second, its average growth amongst the continent's countries (- 3.9% in 2008-2015).
The upper two quadrants feature those countries which send 62% to 100% of produced output for export. At the same time, the countries in the first quadrant post a negative rate of exports growth (Ruanda, Kenya, Tanzania), whereas the countries from the second indicate a positive exports trend (Uganda, Malawi, Zimbabwe). The countries from the third (Burundi, Ethiopia) and fourth quadrants (Mozambique, Tanzania) show that most of the tea produced is consumed domestically.
Pakistan (20% of total African exports in 2015), the U.K. (14%) and Afghanistan (14%) are the largest importers of tea from outside the "Dark Continent". The key to expanding exports lies in stepping up supplies to those countries that consume strong black types of tea (Africa predominantly produces black tea): Russia (accounts for 10% of global tea imports), Pakistan (10%), the U.K. (8%) and the USA (8%). African tea producers will have to promote their tea products at more ambitious prices than their Asian competitors to secure positions in these markets. In addition, strengthening their presence would dismantle the widely disseminated concept that tea from Africa is inferior in terms of quality to its Asian counterpart.
According to the analysis completed by IndexBox, heightened domestic demand, which will in turn increase under the influence of population growth and urbanisation (according to UN forecasts, the share of the population living in towns and cities in Africa will rise from 40% to 56% from 2015-2050) will impact on the African tea market in the near term. The availability of cheap labour, the low level of market saturation and growing demand from North African and European importers are all factors contributing to make the African tea industry appear attractive to investors. Growth prospects are currently curtailed by poor demand from East Asian countries, which prefer gourmet teas (China, Japan), and political instability, as well as high levels of crime and the poor quality of agricultural regulation in force in the African countries themselves.
More data available at indexbox.co.uk/news/tea-production-in-africa-tangible-ambitions-for-growth
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