Negative dry weather in December 2021 and February 2022, the COVID-19 pandemic and global conflict headwinds adversely affected Tanganda Tea Company Limited in the six months ended 31 March 2022.
October to December rainfall in the Southern African region was among the driest on the historiacal record according to Relief Web, with planting getting delayed by over a month. Crops suffered significant moisture stress and near complete write-offs due to a dry spell which befell Zimbabwe in February 2022.
Bulk tea production for the period went down 12% to 5 935 tonnes from 6 762 tonnes recorded in the comparable period the prior year.
Revenue also went down 7% to ZWL 1.909 billion from ZWL 2.061 billion achieved in the same period the previous year.
Besides dry weather, disparities between an increase in production costs and movement in Zimbabwe’s exchange rate adversely affected profitability at the coffee producer according to the Tanganda company chairman H Nkala.
Tanganda recorded a profit before tax of ZWL 589 million in the six months period compared to ZWL 749 million achieved the prior year in inflation terms.
“The exchange rate depreciated by 69% during the period under review versus year on year inflation of 73%,” Nkala says.
“In historical cost terms profit before tax grew by 36% to ZWL 1.265 billion from ZWL 929 million in the prior year.”
Tanganda however made successes in export markets with tea exports increasing by 14% to 3 747 tonnes from 3278.
“The export average selling price firmed up slightly to US$1.43 per kg from prior year average selling price of US$1.41 per kg,” Nkala says.
“Coffee exports of 96 tonnes were 14% above 84 tonnes achieved in prior year. Average export selling price of US$6.67 per kg remained slightly firmer than US$6.50 realized prior year.”
