Uganda: Cocoa Sector Analysis

Although cocoa has been grown in Uganda for decades, it was only around 2001 that the volumes produced began to attract attention. And since local consumption was extremely low, cocoa became an export crop. Exports increased steadily from 2,130 MT in 2001 to 30,000 MT in 2018, demonstrating that there is still sufficient head space, thanks to growing international demand. This growth potential resulted in Uganda selecting cocoa as one of the priority products under EU-EAC MARKUP.

The Uganda Coffee Development Authority (UCDA) and the International Trade Centre (ITC) recently undertook a demand and supply value chain assessment of the sector. The study revealed that Uganda’s top markets for cocoa are in Asia - Malaysia, Indonesia and Singapore. Although the price per tonne is higher for beans going to Europe, exports to European markets have significantly decreased since 2013, probably due to the high EU standards and quality requirements. The report states that current market trends, particularly in Europe, strongly favour organic products and specialty cocoa. Uganda will need to devise strategies to capitalise on these niche segments in order to access higher premiums. The report recommends several measures to establish Uganda as a lasting player in this market. These include strengthening compliance with standards and regulations along the value chain, and better marketing and branding of Ugandan cocoa. You can read the full report here.

MARKUP is supporting a lot of additional activities to strengthen the nascent cocoa sector in Uganda. UCDA is working on a robust legal, regulatory and institutional framework for cocoa. A Regulatory Impact Assessment has been completed and is due to be submitted to Cabinet for approval in late 2020. In addition, two SMEs in the cocoa sector will receive matching grants to address bottlenecks that hamper competitiveness. The grants are expected to be signed off in the next few months. And in a bid to increase market exposure, ITC equipped selected SMEs to make the most of their participation in the Chocoa Trade Fair in Amsterdam in February 2019. You can read about their experience ‘Connecting Ugandan cocoa exporters to buyers and investors’ here.

Lastly, GIZ is working to develop new East African harmonised standards for various products in the cocoa sector. More information on ‘New standards for the cocoa value chain’ can be found here.

These efforts complement work by the Government and other Development Partners to support SMEs along the value chain to drive profitability, productivity and international competitiveness in the cocoa sector.