Coffee sales soar as
Uganda grains sector
regional hope falters
Rich, deep and largely untilled and untapped volcanic soils. Abundant rainfall in most of the country, nearly all year round. A variety of grains and other crops that thrive in the country, with insatiable demand.
Not many African countries are as well-endowed as Uganda, especially in Eastern Africa, where countries such as Kenya, Somalia, Rwanda, Burundi, Southern Sudan and even Ethiopia are reliant on significant and rising food imports to meet their surging needs for basic food products. Only Tanzania has the potential and capability to match and surpass Uganda, with both countries still at their infancy in developing vibrant agricultural sectors that can tap into their rich potential in fertile soils, vast land resources and abundant rainfall.
Uganda is a significant producer of important commodities in the region, and whose demand keep on rising, either regionally or internationally: maize, rice, sorghum, cassava, millet, tea, coffee and a number of oilseeds such as soybean, groundnuts and sunflower. The country is also a leading producer of bananas.
While coffee and tea are traditional cash crops grown mainly for export, Uganda’s maize, beans, ground nuts, and rice crops are the primary agricultural commodities that are consumed locally and traded within the East African Community (EAC) and COMESA region.
According to the government of Uganda, Uganda has a comparative advantage in the region for its grain production and is considered to be the food basket of the region, with more than 2.5 million households deriving their income and employment from the grains sector in Uganda.
It also adds that grains are important commodities of socio-economic and political importance in the country. With one of the fastest growing and youngest populations in Africa and rapid urbanization, the demand for grain as food for consumption, ingredients for manufacturing animal feed and to serve the growing regional trade is bound to increase substantially as the country approaches 2030 – laying the foundation for Uganda to urgently seek new ways to increase production on the farm, reduce food losses and streamline vital grains supply chain infrastructure.
The quest for Uganda to take advantage of the rising opportunities, is however, hampered by a number of challenges, including inadequate supply due to low production and productivity, volatility of agricultural commodity prices, inadequate storage facilitates and minimum value addition.
There is urgent need for policies and strategies to increase production and productivity; address post-harvest management challenges and promote value addition to ensure competitive supply of quality grain and grain products, adds the government in its National Grain Trade Policy, which is being implemented in 2018-22, and outlines the strategic policy actions that will transform the grain sector to ensure sustainable and accelerated growth in grain production, quality storage, value addition and trade volumes.
According to the Policy, the shortage of standardized storage facilities, unreliable electric power supply and high costs, as well as high interest rates for financing among other issues, pose serious challenges to the sector.
In terms of storage, the country lacks government-owned storage facilities, thereby relying on private sector investments by the members of the Uganda Grain Traders Association who have constructed some storage and processing facilities. The national standardized storage facilities for maize only caters for only 12% or 550,000 MT out of 3.2 million MT of total production, hampering the significant trade with some organizations like the World Food Program (WFP), and other trade with regional countries such as Kenya, South Sudan and Rwanda.
Mixed bag as local production stutters
Uganda has made some noticeable strides in the production of key commodities over the past few decades, with some exceptions.
Maize, which has increasingly become the country’s staple after the banana crop, has seen its contribution rise significantly over the last 20 years, with production rising from 800,000 MT in 2000 to a peak of 3.442 million MT in 2018, later dropping to below 3 million MT in subsequent years, with a forecast of 2.8 million MT in 2022, as per FAO figures. Uganda’s maize production is largely consumed in the country, with some volumes traded into Eastern Africa’s growing markets of Kenya, South Sudan and Rwanda plus a vital contribution into the WFP feeding programs in the region.
The country’s maize consumption has kept pace with its production, rising from 776,000 MT in 2000, to 2.2 million MT in 2010, hitting 2.7 million MT in 2022, hence leaving minimal volumes available for regional trade – meaning that the recent stagnation in production volumes after hitting the highs of 2018 leaves Uganda with little to take advantage of rising regional demand.
Rice, another important crop, increased from 71,000 MT in 2000 to a peak of 154,000 MT in 2014, before slipping to a projected 137,000 MT in 2022. In terms of consumption, the country’s domestic consumption has nearly doubled since 2000, from 120,000 MT to 236,000 MT in 2019 and a projected 197,000 MT in 2022. Wheat consumption, which still lags behind other Eastern African giants like Kenya, Ethiopia and Tanzania has seen significant increases from 131,000 MT in 2010 to a high of 560,000 MT in 2020 and is expected to fall to 475,000 MT in 2020.
Uganda has made some of the most astonishing achievements in coffee production, as former regional giant Kenya lags far behind, as it threatens to dislodge Ethiopia as Africa’s largest coffee producer. Hitting an eye-watering 6 million-60 kg bags in 2021, Uganda is on a roll, as a focus on new Robusta variety plantations, favourable weather and government support has seen the country double its production from a low of 3 million bags recorded in 2012.
While coffee and tea are traditional cash crops grown mainly for export, uganda’s maize, beans, ground nuts, and rice crops are the primary agricultural commodities that are consumed locally
The rapid growth in production has been largely attributed to the Government of Uganda-supported Coffee Roadmap program which launched in 2017 that aims to increase coffee production to 20 million bags and triple the incomes of farmers by 2030. The program supports coffee production through the introduction of new coffee varieties, increasing use of inputs, distribution of seedlings, and improved extension services. Under the program, Uganda
The country is also a significant producer of several key commodities such as sorghum, millet and groundnuts, although production has tapered off from the highs of the 2000s in the three crops. Soybean, a vital commodity as the region seeks nutritious and affordable sources of protein, has dropped from a high of about 160,000 MT in the 2000s to 75,000 MT in 2021, while sorghum production has also decreased from 420,000 MT to 250,000 MT while millet has seen a drop from 600,000 MT to 240,000 MT in 2022.
Apart from the above commodities, Uganda is also a sizeable producer of cassava (4.2 million MT), cocoa beans (35,000 MT), groundnuts (336,000 MT), sesame seed (146,000 MT) and sunflower seed (275,000 MT), according to FAO figures.
Local investments rise to tap demand
With a population of 48.5 million currently, and projected to hit 105 million by 2050, Uganda’s young population, with a median age of 15 years, is one of the youngest in the World.
The country’s rapid urbanization rate of 4.5% per annum is projected to increase in the coming decades, with the majority of its population expected to residing in urban areas, from the current 30%, aided by the country’s growing economy, connections with regional economies that will boost regional trade and the exploitation of both mineral and agricultural resources, according to the World Bank.
With the country’s coffee production on an upward trajectory, the government has prioritized local value addition of its coffee crop within the country, even as the country continues to break production and export records. With 2020/21 exports increasing 10 percent year-on-year to 5.9 million bags with the bulk of the exports going into the European Union, United States, Morocco, India, Russia, and Serbia, the government, through its recently passed National Coffee Policy which is being implemented by the Uganda Coffee Development Authority (UCDA), the pressure is on to boost local processing and consumption, which has been hit by the Covid-19 restrictions in the country, falling by half to less than 100,000 bags, well below the pre-pandemic numbers, according to the USDA.
Some of the main coffee processors in Uganda include Kyagulanyi Coffee, Great Lakes Coffee, Ugacof/Sucafina among others. The latest twist to the local processing drive in Uganda is Uganda Vinci Coffee Ltd, an Italian-led coffee processing company that has been given the go-ahead to construct the country’s biggest coffee processing plant in Kampala. With plans to originally process 27,000 tonnes per year, and which would rise to 60,000 MT per year, the venture that has run into headwinds with legislators opposing the deal signed between the company and the government.
In the grains milling side, the country has recently seen some significant investments in wheat and maize milling by a number of players, adding extra capacity and much needed sophistication in the sector to meet rising demand for nutritious, safe and better packaged products. Some of the recent investments include that by Mandela Millers, with 300 MT per day wheat mill and a 48 MT per day of maize milling plant. Another recent investment in the sector was by Master Grain Millers based in the second city of Jinja, which was a 300 MT per day wheat plant. Other significant players are Pembe Flour Mills and Eengano Millers.
However, Uganda’s grains milling sector is still in the control of tens of small-scale millers, which are increasingly visible at urban centres across the country, to meet the rising demand for maize meal and rice. In the rural areas, the age-old posho mills provides some respite to consumers moving from a meal largely made up of bananas and local produce to consumers taking up maize consumption. Some of the medium-scale millers include Grainpulse Limited, Aponye (Uganda) Limited, Afro-Kai Limited, Maganjo Grain Millers Limited and Arise and Shine Maize Millers Limited.
On the animal feed side, Kenya-based Unga Group’s business Unga Millers closed its loss-making maize milling plant in the country in 2017 but has made an announcement of bouncing back through a joint venture with Nutreco. The new joint venture Tunga Nutrition Uganda will make use of Unga Millers’ dormant flour mill in Kampala, converting it into a state-of-the-art feed mill to produce animal feeds and concentrates. HRM-Rainbow, the integrated poultry player, also has one of the most advanced feed mill operations in Uganda.