Cocoa Sector in Uganda Recovers, Exports Grow

Kampala, Uganda (May 25, 2003) - Uganda is a small but growing producer and exporter of cocoa, with both quality and volume of exports increasing significantly since the early 1990s. Exports increased from 2,000 metric tons (MTs) in 1996 to 5,000 MTs last year, earning Uganda $4.97 million in foreign exchange earnings.

Under the USAID-funded Uganda Investment in Developing Export Agriculture (IDEA) project, on which Fintrac is a subcontractor to Chemonics and responsible for the program's high value crop component, Fintrac staff have been assisting producers of cocoa since 1997. Although cocoa is not considered a "high value" commodity due to relatively low returns compared to other crops such as vanilla and cut flowers, there were several reasons that the team decided to focus on the commodity. According to High Value Advisor Dr. Steve New, "the crop is easily produced by smallholders who are accustomed to lower returns from staple commodities. Cocoa therefore presents Ugandan smallholders with relatively strong commercial opportunities." Furthermore, producers in many areas were contending with coffee wilt, which, compounded with falling prices, made growers keen to explore alternatives such as cocoa.

International and local cocoa traders were confident that the long-term market prospects were good and that demand would increase for Ugandan cocoa if production could be improved and increased. The high value team's initial production assessment revealed that, despite higher altitudes (1,000 meters or more), Ugandan growing conditions were still competitive. The major problem was that many mature cocoa trees had been neglected and were in need of rehabilitation.

The team began working with the Ministry of Agriculture, Animal Industry and Fisheries (MAAIF) cocoa team and the newly formed Uganda Cocoa Association to implement a technical assistance package aimed at strengthening the industry. Assistance has included: pruning and tree maintenance to bring neglected trees back into production; post-harvest handling, fermentation and grading at the village level to improve quality; and introduction of a Code of Practice incorporating basic EUREPGAP principles into production.

In addition to the rehabilitation of mature trees, there is now a large demand for cocoa tree seedlings from MAAIF and private nurseries. MAAIF has estimated that more than 3 million seedlings were planted during 2001/2002 and will come into production within four years. Dr. New notes that "the progress and impact to date has been impressive, mainly because cocoa prices and demand have increased continuously over the past three years to reinforce our technical inputs and motivate the growers." Export earnings are expected to increase another 20 percent in 2003 to $6 million.