Boosting Malawi’s Tea Industry: Challenges and Opportunities for Business Growth

Key Business Points

• Increase production, improve prices: Malawi’s tea industry needs to focus on increasing production while improving prices to boost total revenues.
• Strengthen smallholder institutions: Supporting smallholder tea farmers through strengthening their institutions and creating a conducive environment for social dialogue is crucial for improving production and productivity.
• Diversify and innovate: The tea industry should consider diversifying and innovating to open new opportunities and sustain current markets, including exploring modern varieties and technologies.

Malawi’s tea industry faced mixed fortunes in 2024, with production increasing slightly to 46.3 million kilogrammes, but declining prices undermining total revenues. According to the Reserve Bank of Malawi (RBM) Report and Accounts for the Year Ended December 31 2024, tea output increased by 0.8 percent, but the sector was affected by a 5.3 percent decline in prices. The average price per kilogramme dropped to $1.23 (about K2 153) from $1.30 (about K2 276) in the previous year, resulting in a decline in tea sales proceeds to $6.8 million (about K11.9 billion) in 2024.

Favourable weather conditions contributed to the increased production, according to Tea Association of Malawi Limited chief executive officer Tonda Chinangwa. However, the quoted earnings are based on auction prices, which are way below export earnings after value-addition. Chinangwa highlighted that the real export earnings would exceed the estimated values, emphasizing the need for the industry to focus on value-addition to increase earnings.

Trust Africa programme officer Beatrice Makwenda attributed the improved production to current efforts to strengthen smallholder institutions and create a conducive environment for social dialogue. The tea sector is working towards improving both production and productivity, and changes in industry practice, coupled with research programmes targeting modern varieties and technologies, will result in ethical tea production that will sustain current markets and open new opportunities.

The local tea industry is a significant contributor to Malawi’s foreign exchange earnings, accounting for about eight percent of forex earnings and 11 percent of national employment. The industry employs about 60 000 temporary and permanent workers, making it a vital sector for the country’s economy. As Tea Association chairperson Sangwani Hara highlighted, enhanced trade can provide a good alternative to aid and development assistance through increased exports of products like tea. With increased tea imports from Malawi, British tea drinkers will be allowed to consume a great product at a fair price while contributing to Malawi’s and tea estates’ foreign exchange earnings and development agenda.

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