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Uganda expects tea production to rise 3 pct this year

KAMPALA, July 6 (Reuters) - Uganda's tea production is set to rise by 3.4 percent this year, lifted by a maturing new crop and good rains, an industry official told Reuters on Thursday.

The crop is one of the east African nation's main exports, alongside coffee and tobacco, and an important source of hard currency.

George William Ssekitoleko, executive secretary of the Uganda Tea Association, said production this year will likely hit 60 million kilogrammes, a notch up from output of 58 kilogrammes in 2016.

"For about two to three years, the government has been distributing seedlings to farmers. Some of this crop is now ready for harvest," he said. Most growing areas were also receiving higher-than-average rains, he added.

Ssekitoleko said increased output was likely from two districts in northwestern Uganda, where the government has been distributing free seedlings to expand the crop's cover from traditional growing areas in the centre and southwest.

The majority of Uganda's leaves, produced on around 25,000 hectares of land, are sold at Kenya's Mombasa tea auction.

Kenya is the world's leading black tea exporter.

With extra acreage planted in recent years, Ssekitoleko said Uganda's production had the potential to reach 70 million kilogrammes but that frequent droughts were a big problem.

Progressive shifts in traditional weather patterns have seen increasingly erratic and scarce rains in Uganda, exacting a heavy toll on the country's mostly rain-fed agriculture.

Arable land is also increasingly lost to human settlement in a country with an annual population growth rate of 3.2 percent, potentially limiting the area for expansion of acreage for key crops like tea, coffee and sugar cane. (editing by Katharine Houreld and Susan Fenton)