Africa's second-biggest tea grower is constrained by storage for its leaf as the coronavirus pandemic curtails global demand, driving warehouse costs higher, according to a lobby group.
Storerooms in Mombasa, in neighboring Kenya, from where Uganda auctions its tea, are overflowing due to low demand and a shortage of shipment containers, said Gregory Mugabe, chairman of the Uganda Tea Association. Factories can't store all the leaf locally because of limited space, he said by phone Thursday from the capital, Kampala.
Uganda, along nine other eastern Africa nations, sells 95% of its tea at the weekly Mombasa auction that's one of the biggest globally. Prices for its produce have dropped as much as 40% this year, mainly because of the outbreak, Mugabe said.
Favorable rain could boost production by as much as 8% to 86 million kilograms this year, making an already dire situation worse, he said.
Read more: Uganda Tea Production May Increase to Record for Third Year
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