African production and trade of coffee and tea in perspective: What are the implications for continental trade liberalisation?
This working paper examines the African production and trade profiles for coffee and tea, both important exports from Africa, and the extent to which trade liberalisation across Africa may benefit trade in the sector. Brazil dominates the global production of coffee beans with around a one-third share; Vietnam has increased production dramatically over the last 25 years and has just overtaken Africa’s global share. Ethiopia is the leading African producer, followed by Uganda, Côte d’Ivoire, Madagascar, Tanzania and Kenya. Africa’s share of the global production declined from a high of 28.3% in the 1970s to its current low of 12.0% in this decade. The European Union (EU) has been in the market for over 40% of the African coffee exports since 2001, and the United States and Africa as a single destination have been competing for second and third places. African coffee importers show that only South Africa is breaking the strong North African dominance. Overall, Vietnam is the main supplier of coffee to Africa, ahead of Côte d’Ivoire, Indonesia and Brazil. Collectively, Asia has overtaken Africa as a source of African imports. In general, tariffs facing African exports outside Africa are at zero or very low, but they are higher for several intra-African bilateral trades.
Global tea production is dominated by China and India, but Kenya has moved into third place with a global share of around 8%. Within Africa and specifically East Africa, Kenya has achieved around 60% of African tea production while its neighbours produce most of the rest. The global exporters closely correlate with the main producers, and Kenya is now in third position, behind the major exporters of China and Sri Lanka. Russia is the main tea importer, followed by Pakistan and Egypt in fifth position. Kenya dominates African exporters, and Egypt is the main destination for African tea, followed by the United Kingdom, Kenya and Russia. China and Kenya are the main African tea sources.
Distorting intra-African trade is the role of Kenya in its regional imports and consequent re-exports through the Mombasa auctions, as tea exported from the major producers (Uganda, Rwanda and Tanzania) is reported as almost exclusively exports to Kenya. Egypt is the main importer of tea from Africa, followed by Kenya (re-exports). Other than Egypt, North Africa imports limited values from Africa, and this points to post-liberalisation trade opportunities for at least Kenya as some tariffs there are high.
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