Written By | Staff Writer
A private member's bill would force exporters to add value and create a domestic auction. It lands as the tea sector tries to recover from its worst crisis in years
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A bill with a big ambition
Parliament last week gave Igara County West MP Cohen Amanya leave to introduce the National Tea Bill, a proposed law that would make value addition compulsory for Uganda's tea exports and set up a tea auction inside the country. The leave was granted at a plenary sitting chaired by Deputy Speaker Thomas Tayebwa, as reported by The Cooperator News on 29 October 2026. It is only the first step: the bill has yet to go through committee scrutiny, public hearings and a full debate.
Even so, the proposal puts a long-running complaint into legislative form. For years, Ugandan growers and factory owners have argued that the country sells most of its tea in bulk, at prices set elsewhere, and keeps little of the margin that comes from blending, packaging and branding. Mr Amanya says the lack of a dedicated legal framework has weakened competitiveness and left farmers exposed to unstable prices.
What the bill would do
According to the account of the bill presented to Parliament, it would regulate tea production, processing and marketing and tighten quality standards. Its core proposals are as follows.
The reporting does not give the size of the fines, the levy rate, the timetable for passage or the mechanics of the auction. Those details will decide whether the bill helps or hurts, and they are likely to be argued over in committee.
Why the Mombasa dependence matters
The bill's backers point first to concentration risk. Mr Amanya told the House that about 90 percent of Uganda's tea is sold through the Mombasa Tea Auction, which leaves the industry heavily reliant on a single market. The Uganda Tea Association (UTA) gives the same 90 percent figure in its own advocacy, as reported by the Daily Monitor in April.
That reliance has a price. Mr Amanya noted that poor or medium-quality tea can fetch less than US$1 per kilogramme. Uganda's average at Mombasa hit an all-time low of US$0.66 per kilogramme in 2023 and had recovered only to US$0.85 by the end of 2024, according to Food Business Africa, citing Tea Brokers East Africa. The same report put Kenyan tea at an average of US$2.18 and Rwanda's premium teas at about US$2.92.
Methuselah Kasukaali, MP for Mwenge Central, who seconded the motion, argued that the absence of a law has contributed to poor quality and prices below those of neighbouring countries. He said Uganda earned US$54 million from tea in 2024 and that better quality could lift this to US$120 million. That figure sits below the US$85 million export value that the UTA cited in April, a gap that probably reflects different years or definitions and is worth clarifying when the bill reaches committee.
A sector that is still fragile
The timing is significant because the industry is coming off a hard stretch. The UTA says annual output fell from over 60 million kilogrammes to about 40 million kilogrammes, and prices dropped to as low as US$0.50 per kilogramme at the crisis peak, a slump the association links to the Russia-Ukraine war and instability in the Middle East. Factories downsized or shut when cash flow dried up. The association represents 22 companies operating 36 factories.
Prices have since improved. The UTA says they rose more than 20 percent in 2025, faster than regional rivals, and Food Business Africa reported an average of US$1.14 per kilogramme at Sale 05 of 2025, the first time Uganda's average had topped US$1 in that reporting. UTA chairperson Victoria Ashabahebwa called it "a moment of optimism".
The government has promised support. State Minister Fred Kyakulaga announced a Shs310 billion plan in April: Shs46 billion a year for fertilisers, Shs152 billion in working capital for processors and Shs112 billion to settle seedling debts. The UTA has urged quick release of the Shs152 billion, which would cover about 30 percent of the working capital factories need to buy green leaf. Grace Kyomugisha of Kayonza Growers Tea Factory said this year's Shs26 billion fertiliser allocation falls short and should be paired with the processor bailout. Mr Kyakulaga also floated a national commodity exchange so that direct trade could run alongside Mombasa.
The strains are visible on the ground. The Cooperator News, which reported the bill, also linked to a separate story about Igara tea growers appealing to President Museveni to stop a factory auction. The Igara Growers Tea Factory in Bushenyi faced a mortgagee sale over debts, and the bank has since suspended foreclosure for four months after a parliamentary meeting. The case shows how thin the balance sheets of some farmer-owned factories remain, and that matters for any law that adds obligations.
The case for and against
Supporters see three gains. Value addition could keep more of the retail margin in Uganda. A domestic auction could give local buyers and blenders a place to source tea without going through Mombasa. And a statutory quality regime, with inspection from farm to warehouse, could lift the average grade, which is what ultimately drives price.
The risks are just as real. Compulsory value addition could raise costs for exporters who currently ship bulk tea to buyers abroad that blend it themselves. If the definition of value addition is loose, it may become a paperwork exercise; if it is tight, it could squeeze factories that lack packing or blending lines. A domestic auction needs enough buyers and volume to discover a fair price. A thin local market may give worse prices than Mombasa, and exporters facing a mandatory local sale might simply move volumes informally. Heavy penalties, such as a fine equal to the value of the tea, would hit hardest the small factories that have least room to adapt.
Import controls raise a separate question. Uganda is a small tea producer relative to Kenya, and blenders sometimes need particular grades. The bill's test of whether a grade is available locally or at the auction will need clear rules so that it does not become a source of delay or discretion.
What farmers should watch
For growers, who sell green leaf to factories, the bill's effect will come indirectly, through the prices factories can pay. State Minister Desire Muhooza told Parliament the ministry is consulting sector players, and said the process had been delayed by the rationalisation of the National Agricultural Advisory Services (NAADS). That suggests the ministry has its own legislative thinking under way, and the private member's bill may end up merged with or reshaped by a government proposal.
Growers should press for three things as the bill moves: a farm-gate price formula or at least transparency on how auction and value-addition gains are shared; support for factories to invest in packing and blending before penalties bite; and fast release of the promised Shs152 billion working capital so that factories can buy leaf on time. Without those, a law that targets exporters could simply be paid for by growers through lower leaf prices.
The bottom line
The National Tea Bill is early, and the hard numbers that would show its impact are missing. But it has brought the structural question to the floor of Parliament: whether Uganda should keep selling tea mostly as a bulk commodity through Mombasa, or build the processing, branding and trading capacity to capture more of the value. The answer will depend less on the principle, which few dispute, than on the design of the penalties, the levy and the auction, and on whether the sector's recovery is strong enough to carry the extra obligations.
