THE AFRICAN BUSINESS FORTUNE MAGAZINE ISSUE #006 The African Business Fortune Magazine | Page 20

THE AFRICAN BUSINESS FORTUNE Income generator
While cotton had a decline of 45 per
cent in export values despite a 63 per
cent increase in export quantities in
the same period.
Revenue recorded from cotton in the
first half of financial year 2013/2014
indicated $3m (Shs10b) a decline from
$5.7m (Shs19.2b) recorded the previous year.
This makes cocoa the fourth highest
revenue generator (nine per cent of
total income) behind coffee, tourism
and tea.
While production as of September last year stood at 24,008 metric
tonnes, earning an estimated $67.8m
(Shs228.4b) in export, Uganda targets
$140m (Shs471.8b) by 2020.
Data from the CDP indicates that
there were 25,000 hectares of both
young and mature cocoa as of June
2015. The target is 50,000 hectares by
the end of 2020.
There are about 38,000 cocoa smallholder farmers in Uganda organized in
producer business groups. In Bundibugyo District, for instance, there are
3,000 smallholder farmers organised
in 51 producer cooperatives.

There are also 12 cooperatives registered with the Ministry of Trade, Industry and Cooperatives, and the number is
growing.
Uganda’s cocoa is exported mainly to
Switzerland, Malaysia, Sri Lanka and Belgium.
Cocoa is becoming a very big and profitable enterprise in the country with the
demand for the commodity and its products is increasingly growing internationally mainly in China which is the biggest
consumer of cocoa products worldwide.
High pricing
Despite huge potential in the sector,
Uganda still lack we a policy on cocoa
despite the CDP having worked on the Issues Paper and the policy proposal.
The November 2015 review of the cocoa market published by the International Cocoa Organisation (ICCO) showed the
daily price averaged $3,361 (Shs11.3m)
per ton, up by $163 (Shs549,310) compared to the average price recorded in the
previous month.
Uganda has for many years maintained
an average $3,182 (Shs10.7m) per tonne.
These high price levels have not been
seen since the period of the export ban
imposed on Ivorian beans four years ago

20 MAY - JUNE 2016 THE AFRICAN BUSINESS FORTUNE

in the first quarter of 2011.
The new markets in China and other Asian
economies give new prospects and benefits
to the farmer today. This is coupled with the
strong option buying interests from traders,
which has also contributed to the bullish
sentiment within both local and international market.
However, experts are worried about credibility of exporters and increased number
of cocoa dealers in an unregulated industry.
This is a challenge birthed by the government’s trade liberalisation policy allowing
any individual to participate in the industry
hence compromising quality.
Some of the major bottlenecks for the
crop are poor quality of cocoa on the market and information gap and the poor road
network – partly related to a weak extension
system that translates to poor post-harvest
handling.
Despite offering a good price, international buyers are not very happy with the quality but they continue offering better prices
because of the alkalinity and a nice aroma of
our cocoa and the bigger size of the bean.
Cocoa from other producing regions like
Asia and Latin America tend to have a certain level of acidity so they continue buying
ours and mixing with the rest.