Tea farmers across the Kigezi region are expressing renewed hope after processing factory managements increased the price of a kilogram of green tea leaf from Shs250 to Shs450.
The price adjustment comes as a major relief to a sector that hit rock bottom in November 2023, when cratering auction prices in Mombasa, Kenya, forced the farmgate price down from Shs500 to Shs200 per kilogram. The sharp decline prompted many frustrated farmers to abandon their gardens, while others chose to uproot their crops entirely.
Mr Francis Byamukama, one of the affected tea growers, revealed that he uprooted half of his 14-acre tea estate to venture into maize and banana farming. He noted that maintaining vast tea fields had become financially unviable, given that the meager earnings could no longer cover the high cost of inputs and labor.
Reacting to the price recovery, the Secretary General for the Southwestern Uganda Tea Nursery Bed Operators Association, Mr Caleb Kipande, described the surge as both a lifeline and a vital incentive for resilient growers.
“We are grateful that the price of a kilogram of green tea leaf has increased from Shs250 to Shs450. Although our wish is to have it increased to at least Shs600, the recent increase is not only a relief but a motivation to farmers that had thought of abandoning the enterprise,” Mr Kipande said.
Mr Kipande noted that Kanungu District alone hosts roughly 15,000 tea farmers, served by six operational processing factories, with a seventh currently under construction. Additional factories have also been established in Kisoro, Kabale, and Rukungiri districts to curb the heavy transport burdens previously borne by growers.
He emphasized, however, that soaring input costs remain a severe bottleneck for production, explaining that the price of a 50kg bag of fertilizer has surged from Shs120,000 to Shs180,000 in recent years.
Confirming the upward adjustment, the General Manager at Kayonza Tea Factory in Kanungu District, Mr Naboth Amutuheire, attributed the increase to favorable market developments in Kenya.
“It is true the price of a kilogram of green tea leaf has been increased from Shs250 to Shs450 because the market at the auction market in Mombasa, Kenya, has improved. As processors, we are happy that about 95 percent of the abandoned tea gardens have been rehabilitated,” Mr Amutuheire said.
Despite the positive momentum, Mr Amutuheire highlighted that processing facilities are grappling with severe working capital deficits needed to procure fertilizers, service bank loans, and pay workers and suppliers. He explained that the downturn began during the COVID-19 pandemic and was exacerbated by armed conflicts in Arabian nations, which historically served as primary buyers for Ugandan tea. He added that Kayonza Tea Factory, which serves around 9,000 shareholders, remains hopeful as international auction markets continue to stabilize.
Weighing in on the industry’s recovery path, the Chairman of Tea Farmers in South Western Uganda, Mr Frank Byaruhanga, appealed for direct government intervention to bail out heavily indebted processors, exporters, and growers.
Mr Byaruhanga urged the state to stabilize the local electricity grid to eliminate the exorbitant operational costs of running diesel generators. He further called for deliberate budget allocations toward rehabilitating rural road networks to lower transport costs from farm gates to processing plants.
“We appeal for a tax holiday for processors and exporters if they are to recover from the financial crisis they encountered when the price of processed tea from Uganda almost lost market share on the international market. The government should invest in reviving the tea enterprise because it has been getting a lot of foreign exchange from it,” Mr Byaruhanga said.
He also reminded the government to settle the Shs112 billion debt owed to tea nursery bed operators for seedlings supplied between 2016 and 2022. Citing a prior directive by President Museveni, Mr Byaruhanga stressed that releasing these funds would enable operators and farmers to pay casual laborers and fully restore neglected gardens.