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July 12, 2011

Uganda’s cocoa exports look up as Ivory Coast falters

by Bamuturaki Musinguzi and Sharon Mushakamba

Uganda is projecting a 13 per cent jump in earnings from cocoa bean exports this year, riding on improved crop productivity and better global prices.

The Ministry of Agriculture last week said production is expected to reach 17,000 metric tonnes, up from last year’s 15,000 metric tonnes, an improvement that should push earnings to $51 million from $45 million.

“We plan to expand the cocoa growing hectares and also provide farmers with the required resources and technological knowledge in order to boost production levels from the current 15,000 metric tonnes to our target of 50,000 metric tonnes by 2016,” said John Muwanga Musisi, Agriculture, Animal Industries and Fisheries Minister.

Uganda cocoa exports have grown from 6,000 metric tonnes in 2004/05 valued at $8.7 million to 13,800 metric tonnes in 2008/09 worth $41.4 million.

Lack of awareness and low production are the two major challenges facing the sector, Musisi observed. “Not many Ugandans know that cocoa is grown in the country. The schools curriculum mentions that cocoa is grown in Ghana and Nigeria and not in Uganda,” he said.

“Uganda’s cocoa production is still too low to attract credible investors into value addition. If we are to sell intermediate products like cocoa butter or cocoa powder we would earn three times more than what we earn when we export raw cocoa beans. According to the potential investors our production levels are still low because their heavy machinery can’t run all year round on just 15,000 metric tonnnes,” Musisi added.

“Otherwise, Uganda is at an advantage over the other countries simply because we are at a higher altitude of between 1,100 ­and 1,300 metres above sea level compared with West Africa with an altitude of between 0 and 300 metres above sea level where humidity is high, attracting high infestations of diseases and pests,” he noted.

Cocoa was introduced in 1901 to reduce dependency on coffee as the main export for Uganda, increase foreign exchange and eradicate household poverty.

According to Mr Musisi, all cocoa producing countries including Uganda benefited from the recent chaos in Ivory Coast, the world’s largest cocoa bean producer, because the price per tonne shot to $3,700 from $3,000 worldwide. “Currently a tonne goes for between $3,000 and $3,350, which is still high,” he said.

According to the United Nations Food and Agriculture Organisation, world cocoa production is projected to grow at a rate of 2.2 per cent a year, from 1998-2000 to 2010, compared with the 1.7 per cent growth during the previous decade, and reach 3.7 million tonnes.

During the same period, Africa’s share in the global production is expected to decrease slightly from 69 per cent to 68 per cent, while the share from the Far East is projected to remain at 18 per cent, Latin America and the Caribbean at 14 per cent. Africa is expected to remain the world’s leading cocoa producing area over the next decade, FAO adds. Production in Ivory Coast, the world’s largest cocoa bean producer, should grow by 2.3 per cent a year from 1.2 million tonnes of the base period to 1.6 million tonnes in 2010, and account for 44 per cent of global cocoa production due mainly to the increased foreign direct investment followed by the market liberalisation.

According to FAO, output in Ghana, the second largest cocoa bean producer in Africa, will grow from 410,000 tonnes in 1998 and 2000 to 490,000 tonnes in 2010, an annual average growth rate of 1.6 per cent.

The corresponding growth rate for the previous decade was 3.3 per cent. The lower projected growth rate over the next decade will result from the outbreak of diseases (such as swollen shoot virus, black pod and mirids), increased competition in the world market and low export prices.

In 2010, world grindings of cocoa beans, a proxy for world cocoa consumption, amounted to 3.6 million tonnes, reflecting an average annual increase of 2.1 per cent from 2.8 million tonnes during the base period.

Consumption will continue to be concentrated in developed counties, which are expected to account for 64 per cent of world cocoa consumption in 2010. Consumption in these countries is projected to increase at an annual rate of 2.2 per cent from 1.8 million tonnes during the base period to 2.3 million tonnes in 2010.

The East African

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