Investors and industry experts consider Ugandan agriculture potential to be amongst the best in Africa, with low variations in temperature and two rainy seasons, leading to multiple harvests per year. Agriculture is the core sector of the Ugandan economy and the major employer. This sector is expected to be the key determinant in country’s efforts to reduce poverty and attain economic growth in immediate years. Uganda has one of the fastest population growth rate of around 3.3% and this itself, is the principal driver for the increase in grains’ consumption in Uganda. Limited production, due to major productivity constraints and lack of linkages between grain crop research and informal sector, contribute the most towards restraining the market growth. The informal seed system controls more than 80% of the market and is highly unregulated and ruined by illicit grains seed trade.
Maize is the dominant grain crop amongst cereals (75% share), with 2.81 million metric ton of production. Maize is followed by sorghum, with 0.41 million metric ton of production. In the pulses category, beans completely dominate the market, with a share of 96.5% and 1.08 million metric ton of production. Among oilseeds, groundnuts lead with 41.5% market share, followed by sunflower with 34.3% market share. Cereal production in Uganda is growing on an average rate of 3.30%. Growth potential of maize and beans is expected to be the highest among all crops of commercial importance.
Production of maize recorded a CAGR of 1.97% during 2011-15 while the production of beans recorded a CAGR of 3.36% during the same period.
Drivers for grains market:
- Rapidly increasing population growth in East Africa and growing demand for cereals and grains in Uganda.
- Political stability and sustained yearly economic growth of around 7%.
- Agricultural income growth and rise in level of education have led to more usage of fertilizers and crop-protection products, thus, improving the agricultural productivity to some extent.
Restraints for Grains market:
- Low agricultural productivity, due to high incidences of pests, low-quality seeds, less number of skilled agronomists, and flawed supply chain, have led to low-productivity levels in crop production.
- Lack of linkages between research and the seed supply system, which has led to higher presence of counterfeit seeds and very low adoption rate (10%) of certified seeds.
- Being a landlocked country, trade shipment costs are notably high.
- Limited or non-existent irrigation.
- Difficulty to access credit by farmers.
The Ugandan grains market is sub-segmented into three categories, namely, cereals (maize, sorghum, millet, rice, wheat), pulses (beans, cow peas, pigeon peas, green gram), and oilseeds (groundnut, sunflower, sesame, soybean), a total of 13 commercially important crops are considered in this report.
Ugandan grain producers often find it difficult to meet sanitary and phyto-sanitary standards, required to export goods to North America and Europe. The export sector of Uganda is poorly funded, involving small and under-capitalized companies, which cannot support the farmers. Moreover, exports are majorly limited to some European countries and nearby African countries, like, Kenya, Rwanda, Democratic Republic of Congo, and South Sudan. The imports are not substantial; wheat and rice and imported mainly to cater the urban population.
Maize is by far the dominant export commodity in Ugandan grains market, with exports worth USD 78.6 million in 2015. In 2014, the exports of beans was estimated to be around 32,000 metric ton and contributed around USD 26.19 million to the economy. Annual exports of pulses is expected to reach USD 65 million by 2020. During 2010-14, maize exports rose by around 14% to USD 43.5 million, rice by 74.3% to USD 28.7 million and sorghum by a whopping 2414.3% increase from USD 1.4 million in 2010 to USD 35.2 million in 2014. In case of oilseeds, exports of soybean rose by 210.2% from USD 0.29 million in 2010 to USD 0.91 million in 2014, whereas, exports of groundnuts rose from USD 88,000 in 2010 to USD 816,000 in 2014. With the recent developments, in regard to WEMA (Water Efficient Maize for Africa) project, and a substantial portion of more than a million migrant refugees from South Sudan being encouraged and incentivized to shift from cultivation of vegetable crops to crops of commercial importance, cereal crops, like maize, sorghum and rice are expected to witness good future growth prospects.
Recent Industry Insights
- A recent trading partnership between Uganda and Kenya is expected to bring prosperity and better trade relations for both countries. The two countries partnered up to balance out the surplus of grain produced in Uganda, with the growing demand coming from Kenya. This partnership is expected to allow more effective, efficient trading of popular grains, including green grams and soy beans.
- Fall armyworm infestations, reported in 60 of the country’s 111 districts, have adversely affected yields, mainly of maize, in localized areas. Total cereal production for 2017 is tentatively set at 3.2 million ton, 7% below the previous five year average.
- The five East African Community (EAC) states have finally agreed on the recommended moisture content for cereals and grains in the region. Cereal traders in the region can now sell their produce with ease. As Ugandan standards of moisture content stands at 15%, far below the required standard, negative short-term impacts are expected in the Ugandan grain exports.
- The Kingdom of the Netherlands has launched two agriculture support programs in 2017, valued at EUR 22 million (Shs80billion), for improved seed quality and market linkages for farmers. The integrated Seed Sector Development Plus (ISSD Plus) project and the resilient Efficient Agribusiness Chains (REACH Uganda) project, under the international fertilizer Development Center, will run for a period of 4 years.
- Agriculture Cluster Development Project, recently, launched by the government of Uganda, aims to raise farm productivity, production and marketable volumes of specified agro-commodities across specific geographical clusters in Uganda. Market linkages, post-harvest storage, handling and value-addition are also expected to improve, significantly.
Key Deliverables in the Study
- The report highlights production, consumption, import and export of major grain crops grown in Uganda, along with recent market trends, government regulations, growth forecast, major seed companies, upcoming companies and projects, etc.
- The report talks about economic and social conditions of Uganda and provide a future forecast for production data of major crops relevant to Ugandan agriculture, in addition to that of future exports and imports.
- The report offers Porter’s five forces model, supply chain analysis and network & retail sector analysis for the major grains industry in Uganda. PESTLE analysis of the country is also included.
- The study clarifies that, currently, Uganda is not facing any food shortage or crop production crisis, but a rapidly increasing demand for food, both, in Uganda and other East African countries warrants much better efforts, so as to increase productivity levels and trade in regard to grain crops.
The Report Holds Importance for the Following Stakeholders:
- Growers and packers
- Commodity traders
- Supply chain analysis
- Regulatory framework
- Trade analysis
- Trend analysis
1.1 Market Definition
1.2 Key Findings of the Study
2. Research Scope and Methodology
2.1 Study Deliverables
2.2 Market Segmentation
2.3 Study Assumptions
2.4 Research Design
3. Market Dynamics
3.1.1 Expanding Export Markets in East Africa and Growing Demand for Cereals and Grains in Uganda
3.1.2 Political Stability and Sustained Yearly Economic Growth of Around 7%.
3.1.3 Growth in Income and Education Leading to Greater Adoption of Agricultural Inputs like Fertilizers.
3.2.1 Low Agricultural Productivity, due to High Incidences of Pests
3.2.2 Low adoption Rate of New Improved Seeds.
3.2.3 Inefficient infrastructure, Particularly with Regard to Irrigation and Road Network.
4. Industry Analysis
4.1 Porter's Five Forces Analysis
4.1.1 Bargaining Power of Suppliers
4.1.2 Bargaining Power of Buyers
4.1.3 Threat of New Entrants
4.1.4 Threat of Substitute Products
4.1.5 Degree of Competition
5. Market Segmentation
5.1.1 Market Size (in USD million)
5.1.2 Domestic Production Overview
5.1.3 Domestic Consumption Overview
5.1.4 Import Value & Volume
5.1.5 Export Value & Volume
5.2.1 Market Size (in USD million)
5.2.2 Domestic Production Overview
5.2.3 Domestic Consumption Overview
5.2.4 Import Value & Volume
5.2.5 Export Value & Volume
5.3.1 Market Size (in USD million)
5.3.2 Domestic Production Overview
5.3.3 Domestic Consumption Overview
5.3.4 Import Value & Volume
5.3.5 Export Value & Volume
6. International Trade & Price Scenarios (Major Grains)
6.3 Finger Millet
6.7 Cow Peas
6.8 Pigeon Peas
6.9 Green gram
7. Regional Analysis
7.1 PESTLE Analysis
7.2 Supply Chain Analysis
7.3 Government Policies
8. Competitive Analysis
8.1 Distribution Network & Retail Analysis
8.2 List/Profile of Key Players