Posted on February, 3, 2022 at 07:21 am
The performance of the second quarter of fiscal year 2021/2022 whereby Rwanda’s agricultural exports revenues increased by 39 percent compared to the same period of last fiscal year, has offered optimism among exporters and farmers alike.
The latest statistics released by the National Agricultural Export Development Board (NAEB) on Tuesday, February 1, indicated that agriculture export fetched over $158.5 million (about Rwf160 billion) during this period.
They include figures of production, export volumes and generated revenues from agricultural commodities in a three-month period covering the months of October, November, and December, 2021.
In the second quarter of 2020/2021, Rwanda had generated slightly over $114 million from agricultural exports, reflecting a 5.5 per cent drop compared to the performance of the same period in the previous fiscal year.
Specifically, the latest statistics show that coffee export revenues went up to $38.4 million from $26.1 million registered in the second quarter of 2020/2021.
This data represent a substantial increase of 47 percent, attributed mainly to the good price at the international market, where the average price rose to $4.9/kilo from $3.7/kilo in the previous period under review, a rise of 32 percent.
Speaking to The New Times, Siméon Ngendahayo, Managing Director of West Hills Coffee – a local coffee exporting company – said prices of coffee significantly increased at the international market, which is one of the factors that drove up revenues.
“Prices were very good, which contributed to increased revenues,” he said.
According to Ngendahayo, the increase in coffee prices was attributed to factors including the supply decline from major producing countries, especially Brazil.
Brazil is the top coffee-producing country in the world, and it single-highhandedly produces nearly 40 percent of the world’s coffee supply.
Last year, Brazil was hit by climate change events including drought and frost – a situation that was likely to negatively impact the production of its coffee plantations.
In two months – October and November – of 2021, coffee exports by Brazil decreased by 31.4 percent to 6.36 million bags from 9.27 million bags, according to the International Coffee Organization, which said that average coffee prices hit a 10-year high in December last year.
Though coffee shops were closed because of the Covid-19 pandemic, Ngendahayo said that coffee was still consumed in homes.
“We expected that people would cut the consumption of coffee as a result of the Covid-19 pandemic effect. However, we realised that an estimated 70 percent of the coffee is consumed in their homes,” he said.
However, he said that they had a challenge of transport cost which went very high as it doubled compared to the pre-pandemic charges.
Trickle-down effect
Moreover, Ngendahayo said the rise in coffee prices at the international market had started having a good impact on farmers’ income as they get more on a kilogramme of coffee cherries.
Fulgence Sebazungu, the president of the Rwanda Coffee Cooperatives' Federation (RCCF) told The New Times that the rising prices at the international market is good news for coffee farmers as their produce is bought based on such prices.
Though the farm gate price that was set by NAEB in January 2021 was Rwf248 a kilogramme of coffee cherries, some farmers got up to Rwf500 – a kilogramme from exporters, Sebazungu said, indicating that last year, there was competition among coffee exporters while buying farmers’ produce.
“When coffee prices increase at international markets, the farmers benefit from it,” he said, adding that this motivates farmers to grow the crop as they get value from it.
Horticulture and other commodity performances
According to the NAEB statistics published on Tuesday, quarterly export revenues from traditional commodities (coffee, tea and pyrethrum) increased by 36 percent to more than $63.7 million up from over $46.8 million in 2020/2021 fiscal year.
The revenues from non-traditional commodities exports (exports that are relatively new) increased by 41 percent to $94.7 million from $67.2 million in 2020/2021 fiscal year.
Among these, commodities that performed better are fruits, whose revenues rose by 34.6 percent, and flowers by 48.8 percent.
Robert Rukundo, the Chairman of Horticulture Exporters Association of Rwanda told The New Times that the export statistics are promising for the agriculture sector growth.
“Within the current challenges that we have faced, I would say that’s a wonderful improvement in terms of growth in agriculture sector,” he said.
“The market has started opening up, but we still have the effects of the pandemic whereby the operation cost is high,” he said, also citing high freight charges for horticulture produce.
“If we had no issue of high freight charges, I think the revenues would have been much higher,” he said.
Rwanda has a target to generate $1 billion from agricultural exports by 2024.
To achieve this, NAEB said its activities are focused on supporting increase in productivity and quality of prioritised agri-export value chain, support the value addition and market penetration of Rwanda agri-exports, among others.
It is to note that agricultural exports from Rwanda generated over $444.8 million in the entire 2020-2021, representing a revenue increase of 6.17 percent compared to $419 million earned during the previous fiscal year.
This growth, which was registered despite the outbreak of Covid-19, came after two consecutive years of agricultural exports decline
Source: The New Times