Malawi’s tea market which is currently undergoing one of the worst seasons has seen prices going down sharply for the past few months.
This has seen the Limbe Auction trading at prices lower than US$1.
Tea Association of Malawi (Taml) Chief Executive Officer, Clement Thindwa, said the lower prices are due to lack of competition among the buyers. He said the auction has seen a drop in tea buyers to three only.
“We have about 36 registered buyers, but only three of them are active and have been here at the auction,” he said.
Thindwa said the prices tend to go up when competition is high. “Simple mathematics tells us that when the supply is low, the demand is high and prices go up. This was supposed to be the case with us, but it is the other way round because we have few buyers,” said Thindwa.
Tea production has gone down from 52,000 metric tonnes to 39,000 metric tonnes, with prospects that this year, the production will even be lower.
Tea is the country’s second largest foreign exchange earner after tobacco.
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