Burundi Tea Buyer Prothem Urges Government to Increase Prices for Growers

By Desire Nimubona, Bujumbura  Bloomberg Correspondant
Prothem SA, a closely held Burundian tea buyer, urged the government to increase the price it pays for the leaves in the East African country after the state ordered growers to stop selling their crop to the company.

“We urge the government to revise upward the cost of a kilogram of green tea instead of prohibiting best-bidder operators to buy tea,” Epitace Bayaganakandi, chairman of Prothem, told reporters on May 20 in Bujumbura, the capital.

Growers in the East African nation were ordered to stop selling to Prothem last week after it offered farmers 200 francs (16 cents) per kilogram (2.2 pounds) for their crop, compared with the 160 francs paid by the government. Police have been deployed at the company’s offices in Mwaro, about 41 kilometers (25 miles) east of Bujumbura, to prevent growers from selling their leaves.

Burundi relies on tea for half its export revenue. Crop yields are recovering after slumping from more than 9,000 tons in 2001 because of an insurgency that displaced small-scale farmers who account for 80 percent of the crop, according to the state-run Burundi Tea Board. Production this year may total 7,800 tons, the board said in January.

The board says growers should sell their leaves to the state because cultivation is financed by government revenue.

“We cannot allow people to reap where they did not sow,” Alexis Nzobonimana, director-general of the board, told reporters on May 17. “We have taken loans from banks to help growers buy chemical fertilizers and pay agronomists who supervise them. As a result, tea must be sold in the public factories.”

Burundi’s tea industry was deregulated in 2007 and four private companies were allowed to begin operating including Prothem, Complex Burundi-Hollandais, Caspian SA and Camellia. The operators compete with the board, which has five plants across the country.

Source: Bloomberg.com

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