Small-scale tea farmers in southwestern Uganda are facing continued economic pressure from low prices and volatility in the international tea market, but emerging value-addition initiatives are offering new hope for the sector.
Farmers in districts including Bushenyi, Kanungu, Kisoro and Kabale have for years struggled with unstable earnings despite Uganda’s tea exports generating about $55.8 million annually.
At farm level, green leaf prices in parts of Bushenyi have historically fallen to as low as Shs100-130 per kilogram, although recent adjustments have pushed them to about Shs250. Farmers say the amount remains below the estimated Shs480 needed to cover production costs.
Industry players attribute the challenge to Uganda’s reliance on bulk tea exports through the Mombasa auction system, where prices fluctuate and Uganda’s tea is often sold as a low-value commodity or blending material.
Although premium grades from the Kigezi region have recently improved in quality and attracted better auction prices, Uganda still lags behind regional competitors such as Kenya and Rwanda, whose processed tea fetches higher returns.
With only about 3 percent of tea consumed locally, Uganda remains heavily dependent on raw exports, limiting opportunities for higher-value earnings.
The weak position in specialty markets, including Orthodox tea, has also contributed to low profitability, prompting some farmers to uproot tea bushes in favour of food crops.
However, small-scale processors are beginning to shift the industry towards value addition.
In Kabale District, Yildi Enterprise Limited in Kitumba Sub-county is producing blended herbal, masala and packaged tea products targeting both local and export markets.
The company director, Mr Jamir Karigiraki Katwigi, said the firm entered value addition to improve competitiveness of tea from the Kigezi region.
‘We embarked on value addition in tea to increase its value on the market and enable it compete both in Uganda and internationally,’ he said.
The company produces tea blends infused with herbs and spices such as ginger, cloves, cinnamon, basil, cardamom and black pepper. It also produces herbal tea using ingredients including rosemary, lemongrass and Ocimum suave.
Mr Katwigi said the products are designed for flavour and medicinal benefits, including relief from cough, flu, digestive issues and stress.
Despite progress, he cited limited raw herbal inputs, factory congestion and high taxation as major constraints to expansion.
‘Farmers growing agricultural inputs are still very few, which limits production capacity,’ he said, adding that expansion and capital investment are urgently needed.
Farmers say value addition remains key to improving incomes.
Mr Wilson Nshimiye from Kisoro District said most farmers still sell raw tea, limiting earnings.
‘If value is added, farmers will earn more money and our tea will gain more value on the world market,’ he said on Sunday.
Dr Francis Runumi from Kabale said many farmers had abandoned tea due to low prices but are now returning as demand for processed and green tea grows.
Mr Ernest Bariyanga from Kanungu urged government support for small-scale innovators to boost competitiveness.
The Ndorwa West MP, Mr Eliab Naturinda Mporera, praised Yildi Enterprise Limited for promoting value addition, saying it aligns with government policy.
He pledged to engage relevant ministries and the President to support the initiative.
As Uganda seeks to stabilise its tea sector, stakeholders say value addition may be key to improving farmer incomes and strengthening the country’s position in the global tea market.