Agri-business creating export value in Uganda and Senegal.
In Uganda, coffee makes a substantial economic contribution. Coffee production and harvesting are labour-intensive, and are an important source of employment, income and subsistence. Uganda is a leading African coffee producer and exporter, second only to Ethiopia in Africa, and is the 7th largest producer in the world. The coffee sector employs about 3.5 million Ugandans directly and about 1.5 million indirectly (about 15% of all Ugandans). However, much remains to be done for them to be fully efficient producers and exporters.
Challenges facing Ugandan coffee exporters
The challenges are principally operational and practical. For importers and roasters it has always been crucial that coffee be delivered in the agreed quality, quantity and price, on time, and to the agreed destination. These requirements have become more complex for coffee producers and exporters over time and they now face additional criteria.
* Consistency: Delivery of 'the same quality over time' as most coffee is used by masters for blends that are meticulously formulated. A buyer might not even be interested in the best quality coffee if it does not fit their blending formula.
* Traceability: Detailed tracking at all stages of production, harvest, processing, transportation, storage, shipping, etc. Importers and roasters need to know where responsibility rests if problems arise. Roasters and retailers have to answer questions raised by end-consumers and civil society groups, for example questions related to labour conditions and environmental impact.
* Large quantity: For economy of scale reasons, most importers, roasters and retail chains are asking for larger and larger quantities. With around 80% of the world's coffee being produced by smallholders, making large quantities available presents a challenge for many--even as members of large cooperatives.
A project supporting the coffee sector's export competitiveness in Uganda is currently being implemented by ITC as part of the Netherlands Trust Fund Phase II programme (NTF II), funded by the Dutch Ministry of Foreign Affairs. The project was designed jointly by the Netherlands Centre for the Promotion of Imports from developing countries (CBI) and ITC.
Three key trade support institutions (TSIs) were selected along the coffee value chain to enhance export quality and quantity. From late 2010 until March 2013, NTF II in Uganda is addressing the update of the national coffee export strategy as well as shortcomings at the production, post-harvest and marketing stages.
Production-related issues include the need for better pest and disease control and the promotion of good agricultural practice to achieve supply consistency. In line with the project's focus on building the capacity of selected TSIs to provide effective post-harvest and marketing services, emphasis is put on knowledge dissemination and capacity building. Under the NTF II Uganda project, ITC has built a partnership with the Ugandan Export Promotion Board (UEPB), the Ugandan Coffee Development Authority (UCDA), and the National Union of Coffee Agribusiness and Farm Enterprises (NUCAFE), which covers 125 coffee farmer associations throughout Uganda. The purpose of the partnership is to build on the capacities of these organizations to enhance coffee export.
Senegal is a well-recognized African exporter of quality mangoes. Its main advantages are:
* A longer export season than its counterparts in the Economic Community of West African States (ECOWAS)--May to October;
* Only 6 hours by air and 6 days by boat from its main market, the EU; and
* Appreciated organoleptic characteristics of its mango among European buyers.
Mango exports dropped by more than half between 2009 and 2010, due mainly to unusual heat at the time of flowering, which reduced production (up to 40% in the Niayes area and up to 95% in Ziguinchor). The Kent variety, which represents 70% of exported varieties, was most affected.
Domestic challenges for mango producers include insufficient infrastructure from roads to collection centres, to packing houses and insufficient access to finance. The main difficulties lie with the quality and scarcity of inputs, post-harvest techniques, and pest control, with fruit fly control requiring effective regional cooperation.
On international markets the demands and constraints are numerous. So are the rewards. Certification is key to organizations recognized worldwide, such as Good Agricultural Practice (GLOBALG.A.P.) and British Retail Consortium (BRC) certifications. The market also requires costly pesticide residue analysis in line with target countries' maximum residue level (MRL), as well as full traceability from the field to the fork. Nowadays, the European end-consumer expects details about the product's origin, the way it was produced and by whom.
Another challenge for the Senegalese exporter is the level of competition, starting with mango producers in the Economic Community of West African States (ECOWAS), along with other worldwide suppliers, such as Brazil and Israel.
Differentiation is one solution to the challenges adapting the product to the end consumer's needs. This may take the form of accessing a new market, possibly a niche market, to deliver better returns. For instance:
* An air-shipped mango for the premium market with consumers looking for flavour and a higher Brix level (sugar level);
* An organic mango to suit the needs of more health and environmentally conscious consumers; and
* A mango shipped at a lower maturity level from a more fleshy variety to suit the needs of a processing company, typically ending up on a supermarket's shelves in fruit salad.
Under the NTF II Senegal project, ITC is completing a detailed market opportunities analysis in the EU to identify the elements to be improved in the mango value chain in the Niayes region. ITC intervenes on specific aspects such as export logistics, marketing, packaging, quality and trade information. TSIs along the value chain are supported to lock in the newly built capacities. The Senegalese Agency for Export Promotion (ASEPEX) is to be strengthened in its leading role as the national export promotion agency through 'learning by doing'. ITC's sectoral partner is the recently created Cooperative Federative des Acteurs de l'Horticulture au Senegal (CFAHS) and some of its members dealing with mango production and export. Through these joint efforts Senegalese mango growers stand to benefit from improved processes that will deliver long-term growth and diversification in Senegalese mango production and trade.
In the world of mango
* In 2010 the annual mango production was about 34 million tons, of which more than 900,000 tons were exported.
* Three countries are responsible for nearly half of the world's mango exports: India 20%, Mexico 18% and Brazil 10%.
* With 80,000 tons of mangoes produced, Senegal accounts for 0.25% of the world's production and 0.4% of the world's exports.
* Over the past 5 years, mango exports from Senegal represented 20% on average of the ECOWAS region's total exports.
* 23% of Senegalese mango exports were within Africa, with the remainder shipped to the EU.
In the world of coffee exports
* World production of coffee annually is around 7.7 million tons, with Brazil and Viet Nam producing the bulk, at 35% and 15% respectively.
* 2% of the world's coffee is from Africa.
* Uganda accounts for 2.4% of world production.
* Almost 20% of Uganda's coffee is premium, fine-flavoured, aromatic Arabica and 80% is Robusta, used primarily for blends.
Project Manager NTF II Uganda and NTF II Senegal
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|Title Annotation:||ITC IN ACTION|
|Comment:||Agri-business creating export value in Uganda and Senegal.(ITC IN ACTION)|
|Publication:||International Trade Forum|
|Date:||Jul 1, 2011|
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