Chazeiras de Moçambique expects a boost in Zambézia tea production

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Chazeiras de Moçambique expects a boost in Zambézia tea production

1:56 CAT | 15 Feb 2018

RM (File photo)

Prominent Mozambique tea company ‘Chazeiras de Moçambique’ is planning to raise its Zambézia tea production to 1,300 tons this year, 100 tons more than in 2016-2017.

The company has also set ambitious projections for its exports, which from the previous 1,278 tonnes are hoped to rise to 1,350 tonnes for the current harvest.

Chazeiras de Moçambique representative Almeida Lee told the Diário de Moçambique that revenue from exports would increase to US$1,830,000 in 2018, up from US$1,638,000 in 2017.

Lee pointed out that, as a crop heavily dependent on exports, revenue in this sector was strongly influenced by the exchange rate.

“The level of revenue in US dollars is variable in the order of about 5 to 10 percent, and the dollar-metical exchange rate also plays an important role in the stability of the tea-producing companies, taking into account that production costs are mostly in meticais,” Lee notes.

Although previously somewhat disappointed with domestic markets, Chazeiras de Moçambique says he is now becoming more optimistic about domestic consumers.

“The demand for tea consumption in the domestic market and in the international market is increasing every year. International tea prices are expected to increase by around 10 to 15 percent in 2018 as a result of low production in major tea producers like India and Kenya,” he says.

Notwithstanding this favourable trend, there are no plans for expansion either in farming or processing. Any eventual plan in this area would depend on the situation of the metical, especially against the dollar.

“The tea production area is stationary, there is no short-term forecast of major expansion and obviously there is also no expansion planned for industrial processing. If the behaviour of the US dollar exchange rate in relation to the metical remains stable with a tendency for appreciation in the medium term, that may fuel ambitions to increase cultivation areas and, consequently, industrial processing capacity,” he admitted.

Chazeiras de Moçambique, one of the few companies to survive in the area of tea cultivation, processing and marketing in Mozambique, has reduced its level of intervention in the sector.

Previously operating in several Zambézia province districts of Gurué, Ile, Lugela and Milange, Chazeiras currently restricts its activities to Gurué only.

Source: AIM Moçambique