final report cfi market assessment

8/10/2019 Final Report CFI Market Assessment

1/43

CHILD FUND IBAKARA

14

MARKET ASSESSMENTREPORT FOR SELECTED

ENTERPRISESSimsim, Maize, Bean, Groundnut, Pork,Sunflower, Piglets and Honey

By: Mr. Robert Babu of Hallmark Development Agency


2/43

2

EXECUTIVE SUMMARY

This assessment was meant to establish the market situation, risks and opportunities surrounding

commodities currently being produced by youth and caregiver enterprise groups under the

sponsorship of Child Fund Ibakara to maximize their sales and revenue.

The report underscores the huge agricultural potential that the country especially northern

Uganda has. The report also highlights the contribution of agriculture to the countrys economy,

foreign exchange earnings and poverty eradication among others. Tribute is paid to the

considered government effort to enhance and modernize the agricultural sector through various

programs including the Plan for Modernization of Agriculture (PMA) and the National

Agricultural Advisory Services among others. The report also notes that those farmers who

engage in the cultivation of traditional cash crops like coffee, tea and cotton get more income

than those in subsistence farming.The study applied the survey method with a mix of both quantitative and qualitative approaches.

Both primary data and secondary data were collected by administering structured questionnaires

and document review respectively. 100 respondents including buyers and sellers located in the

main agricultural commodity market destinations of the country i.e. Lira, Gulu, Kampala and

Kitgum were interviewed. The data collected was analyzed using SPSS and content analysis

whereupon the report was written.

The study findings paint a rather rosy situation for the selected commodities market noting that

there is ready market for most of them. The assessment also found that there is need for value

addition and entrepreneurship skills for the producers to make the right sales. Processed honey

and the right piglet breeds stood out as very valuable commodities with undisputed

marketability. Pork was noted to sell at a higher price in western and central regions compared to

the other regions of the country..

The report gives a green light to the enterprise groups to continue to engage in their chosen

enterprises but broaden their perspective to engage with other key players (buyers, processors

and link organizations) to maximize sales and revenue, obtain relevant market information and

get access to quality farm supplies.


3/43

3

ACRONYMS

CFI Child Fund Ibakara

FAAB Farming as a Business

HEEC Household and Economic Empowerment Project

MAAIF Ministry Agriculture Animal and Fisheries

MFPED Ministry of Financial Planning and Economic Development

NAADS National Agricultural Advisory Services

PMA Plan for Modernization of Agriculture


4/43

4

TABLE OF CONTENT

CHAPTER I...................................................................................................................................................... 6

BACKGROUND/INTRODUCTION ................................................................................................................. 6

STRUCTURE OF THE REPORT ........................................................................................................... 6

THE STATUS OF UGANDAS AGRICULTURE SECTOR ................................................................................... 6

THE SIGNIFICANCE OF THE AGRICULTURE SECTOR ................................................................................. 6

DYNAMICS OF GROWTH OF THE SECTOR ................................................................................................ 7

MAIN COMMODITIES PRODUCED ........................................................................................................... 7

MAIN CHALLENGES AND CONSTRAINTS .................................................................................................. 8

PURPOSE OF THE ASSESSMENT ........................................................................................................... 9

ASSESSMENT OBJECTIVE .................................................................................................................. 9

ENTERPRISES SELECTED FOR THE ASSESSMENT ............................................................................. 9 METHODOLOGY .................................................................................................................................... 10

STUDY DESIGN .................................................................................................................................. 10

STUDY AREA AND POPULATION: ................................................................................................. 10

SAMPLING ........................................................................................................................................... 10

DATA COLLECTION METHODS ...................................................................................................... 11

DATA ANALYSIS AND REPORTING ............................................................................................... 11

ETHICAL CONSIDERATIONS ........................................................................................................... 11

ANALYSIS, FINDINGS AND DISCUSSIONS ..................................................................................... 13

DEMOGRAPHICS ................................................................................................................................... 13

Demographic information of the buyers interviewed. ........................................................................... 13

Demographic information of cereals and pulses dealers interviewed. ................................................... 13

Demographic information of pork and piglets dealers interviewed. ...................................................... 14

Demographic data of honey dealers ....................................................................................................... 14

SIMSIM/SESAME ..................................................................................................................................... 14

Buyers views ........................................................................................................................................ 14Sellers views ......................................................................................................................................... 14

MAIZE ...................................................................................................................................................... 17

Buyers views ........................................................................................................................................ 17

Sellers views ......................................................................................................................................... 18


5/43


6/43

6

CHAPTER I

BACKGROUND/INTRODUCTIONThis assessment was aimed at supporting caregivers and youth engaged in Farming as a Business

(FAAB) and value addition with the purpose of ensuring that they benefit from the knowledge

and grants given by development partners especially Child Fund and Austrian Government in

order to improve the economic wellbeing of their respective households. The market assessment

was viewed as an objective strategy through which farmers would manage the value chain of

their produce so as to maximize profits in a competitive market space. The market assessment

would also pave way for the small farmers to network with higher level farmers, buyers and

exporters. The enterprises of interest include simsim, maize, bean, groundnut, apiary, piggery

and sunflower.

STRUCTURE OF THE REPORTThe report is divided in to four main chapters with chapter I setting out the background to the

study including an overview of the agricultural sector in the country, chapter II outlines the

purpose of the study and the methods used to conduct data collection, analysis and reporting,

chapter III presents the findings of the assessment, analysis and discussions and lastly chapter IV

offers conclusions and recommendations for the users of the report.

THE STATUS OF UGANDAS AGRICULTURE SECTOR

Uganda is a predominantly an agricultural economy. Agricultural production comes almost

exclusively from 2.2 million smallholders, mostly working 2 to 3 hectares of land, using

traditional methods of cultivation and family labor. Indeed, it was Uganda s subsistence

agricultural production that helped the population to survive the devastation and collapse of

the modern economy during the years of turmoil and to this day many people depend on plots

of land or gardens to provide a steady supply of food. Even in urban centers there is a farmingtradition, which (due to uncertain supply of food from rural areas), leads to urban agricultural

production. Estimates indicate that 30% 50% of families in Kampala engage in agriculture.

THE SIGNIFICANCE OF THE AGRICULTURE SECTOR


7/43

7

Agriculture has an important role to play in Uganda s economic development. It is a source of

food supply and raw materials, a supplier of foreign exchange, a market for non-agricultural

output and a source of surplus for investment (MAAIF, 2008). Agriculture is central to

Ugandas economic growth and the reduction of poverty, accounting for large share of GDP,

exports, and providing employment to a large section of the rural population.

As source of income and employment, agriculture accounts for about 69% of total

employment. Crop farming is the main source of household income contributing over 30% of

all household income in Uganda. Other incomes include farm enterprises such as animal

husbandry, poultry and cottage industries such as brewing. According to the MFPED (2004),

households engaged in the traditional cash crop sector are better off than those in the

traditional food crop sector and to that extent, areas and farmers growing coffee have

benefited more from price liberalization policies and increased access to markets than areasgrowing mainly food crops.

DYNAMICS OF GROWTH OF THE SECTOR

The performance of Uganda's agriculture sector has been extremely variable over the

years. Because Ugandas agriculture depends on rainfall, poor weather conditions result

in low yields and poor performance, in some parts of the country or sometimes for the

sector as a whole. Prolonged dry conditions or wet conditions associated with heavy

rainfall, for example, have negatively affected agricultural production in recent years.

Growth in the agriculture sector doubled in 2008/09 and stood at 2.6% per annum (MFPED,

2009). This growth was driven mainly by an increase in production of food crops, which grew

at 2.9% in 2008/09 compared to 2.4% in the previous year. The improvement in food crops

production was attributed to refocusing of service delivery through the National Agricultural

Advisory and Delivery Services (NAADS), and the recovery of agriculture in the northern

parts of the country. Moreover, the high market prices for food crops were an incentive to

increased acreage.

MAIN COMMODITIES PRODUCED

With a favorable climate year-round and some of the best agricultural land in Africa, Uganda

produces a wide variety of tropical and sub-tropical agricultural products throughout the year.


8/43

8

There are four major sub-sectors in Uganda's agriculture sector: crops, livestock, fisheries,

and the forestry. Of the four, the crops sub-sector is by far the largest in terms of area and

contribution to GDP. Much of this is food crops for subsistence by smallholder households,

with only a third sold to domestic and export markets (World Bank, 2005).

The main food crops are tubers and roots, (cassava, sweet potatoes, yams, etc) bananas,

cereals (maize, millet, sorghum, etc), pulses (beans, peas, etc), oil seeds, fruits (pineapples,

papaya, bananas, avocadoes, mangoes, oranges, etc) vegetables, spices (vanilla, cardamom,

pepper) and flowers. About 49% of the food crops are marketed or bartered for subsistence

consumption outside the market system. In 2000 2007, there was a marked increase in food

production, although this has been achieved through increased acreage in cultivated land

rather than an improvement in yields overall. The major cash crops for the economy are:

coffee (accounting for 272,000 ha and generating about $300 million per annum), cotton(previously the main export crop, earning up to US$ 30 million a year), tea (grown on 20,570

ha, but mostly for export markets earning about $30 million a year), tobacco (grown on

11,590 ha and now earning over $10 million a year), sugar cane (grown almost exclusively for

the local market) and cocoa (which is a relatively new crop).

MAIN CHALLENGES AND CONSTRAINTS

During the 1970-1980s growth in the sector was hampered by a series of policy and structural

constraints which are well articulated in the Plan for Modernization of Agriculture (PMA).

While many of these constraints have been removed, nonetheless, a number of fundamental

ones do persist to this day. They include poor infrastructure (such as feeder roads,

communication facilities, power supply, water, etc), lack of efficient and cost-effective

technology, low rates of adoption of appropriate technology, lack of finance, a complicated

land tenure system, inform ation constraints, weak farmers organizations, lack of market

information, high post-harvest losses, environmental degradation, etc.

(Source: Market assessment and baseline study of staple foods-Country report Uganda 2010, USAID, Chemonics International Inc.)


9/43

9

PURPOSE OF THE ASSESSMENTTo establish the market situation, risks and opportunities surrounding commodities currently

being produced by youth and caregiver enterprise groups under the sponsorship of Child Fund

Ibakara to maximize their sales and revenue.

ASSESSMENT OBJECTIVE To establish the current and future market opportunities of the selected agricultural

commodities within and outside the country.

To explore the possibilities of value addition for the selected agricultural commodities for

both the local and international markets.

To identify potential linkages with upstream and downstream investors in the selected

agricultural produce within and outside the country.

ENTERPRISES SELECTED FOR THE ASSESSMENTThe enterprises listed 1 at the beginning of this report were the ones chosen for the market

assessment. This selection followed the choice of farmer groups (caregivers and youth)

supported by Child Fund under its HEEC project. The groups which hail from Kitgum Matidi

and Lagoro sub counties in Kitgum District were thoroughly trained in farming as a business and

in making wise enterprise choices. As such considering the key factors for enterprise selection

most of the groups settled for these enterprises. CFI accordingly planned and implemented amarket assessment to ensure that the groups are well tuned in their production and marketing

strategy to get the best from the available market for their commodities.

1 Simsim, maize, bean, groundnut, apiary, piggery and sunflower.


10/43

10

CHAPTER II

METHODOLOGY

STUDY DESIGNThe study used cross sectional (survey design) applying carefully selected qualitative and

quantitative approaches to obtain data on previous and current market performance of the

selected enterprises. This design ensured that a representative sample was drawn from the key

market areas for the selected commodities to give valid and reliable findings. Survey design

offers the unique advantage of looking at numerous cases and comparing their responses to

arrive at an optimal finding.

STUDY AREA AND POPULATION:The assessment was conducted in Kitgum, Gulu, Lira and Kampala districts at the main markets

of these towns as presented in the demographic component of this report. The study population

included produce dealers, pork and piglet dealers, and regular buyers at these markets. These

groups were adjudged by the survey team to be the best suited to provide the kinds of responses

that would address the research questions given their role in production and marketing of the

selected commodities.

The selected study areas on the other hand are renowned market destinations of the commoditiesunder investigation. The selected markets attract buyers from across the country as well as

abroad (the Sudan, the Congo, Rwanda and Kenya among others) making for an ideal location

for market assessment.

SAMPLINGThe LQAS sampling technique was applied to ensure the minimum quality standards of the data

to be collected. A sample size of 100 respondents including 45 buyers and 65 dealers in the

selected commodities/enterprises was considered for four study areas (lots). The sample size was

arrived at on the basis of 95% confidence level and +/- 10% confidence interval. Once at the

study towns/markets, the enumerators applied non-probability purposive sampling to identify


11/43


12/43

12

administered to the respondents to seek their consent to participate in the exercise before

questioning commenced.

The respondents especially sellers were assured that this market intelligence would in no way

undermine their businesses but rather make them more affective.

The report shall be shared with stakeholders who participated in the exercise to reassure them

that its a true reflection of the information they provided.


13/43

13

CHAPTER III

ANALYSIS, FINDINGS AND DISCUSSIONS

DEMOGRAPHICSDemographic information of the buyers interviewed.A sum of 45 buyer respondents was interviewed with 64% being female and 36% male. Most

buyer respondents 65% came from an averaged sized household of 6-10 members and the rest of

them from households of between 1-5 members.

Of the 45 buyer respondents, 12 were from Gulu, 14 from Kampala, 13 from Kitgum and 6 from

Lira districts. The selection of the location is commensurate with key regional markets and the

market that the enterprise groups under Child Fund shall potentially sell their products in.Particular markets were visited in these districts namely Gulu municipal main market, Lira

municipal main market, Kawempe division main market and Kitgum Town Council main market

among others.

Demographic information of cereals and pulses dealers interviewed. Most of the respondents interviewed as pulses and cereal dealers deal in a variety of products

including beans, cassava, Gnut, simsim, maize, and sorghum among others. Their sales points

include produce stores and market stalls to mention but a few. 15 of the 30 sellers of cereals and pulses interviewed established their shop in the 2010s, 12 in the 2000s and just 3 in the 1990s

decade. 8 of the sellers interviewed were from Gulu, another 8 from Kampala, 6 from Kitgum

and 6 from Lira. The following divisions, municipals and sub-counties were visited, in Kampala;

central, kawempe and Nakawa meanwhile in Lira and Gulu the exercise took place at the

Municipalities and the Town Council in Kitgum district.

In Kampala the following local markets were visited; Bwaise, Mulago, Owino, Kyebando, and

Nakawa; in Gulu district the main municipal market, Bar-dege, and Juba Road market amongothers were visited; in Lira the main municipal market, Omodo and Oliya among others were

covered and lastly in Kitgum Aringobom, Ayul B, Quarters and Lulojo markets were visited.


14/43

14

Demographic information of pork and piglets dealers interviewed.The respondents in this category comprised of operators of pork joints and barbecue ovens

located at various points in the sample areas like Happy Hours and El-classico in Kitgum Town.

Other areas visited include Luzira, Makindye, Pager crescent, Soweto market, and Namere

Village. Also farmers and other sellers were part of this interview. The businesses of respondents

in this category were established over a period of a decade from 1999 right up to date, 2014.

Demographic data of honey dealers Six (6) dealers in honey products were interviewed in the four study districts. They included

specialist dealers, shops and supermarket.

SIMSIM/SESAME

Buyers views Almost all the buyers interviewed consumed simsim/sesame in one form or the other. The largest

percentage 53% consumed a simsim product at least once a week. Only 2% of the buyers

interviewed did not consume the commodity at all. 20% consumed it after a period of one month

or more. Most buyers 71% would prefer to have their sesame in grain form and a few others

29% would rather have it in pasted form.

Most buyers 45% purchased their sesame from retailers and then produce dealers 30% and

farmers 25%. Most of them 90% contended that simsim was always available in their local

market.

Sellers views Seasonality of market

Most sellers 80% thought simsim/sesame sold best at specific periods i.e. from August to

February. This time also coincides with the harvest season of sesame which starts around August

until early December. So it is just a question of the availability of the product but not seasonalityof the market


15/43

15

Regulations

The sellers interviewed were of the opinion that the product was not restricted by any specific

regulations. Hence there is no legal barrier/costs that must be met for to engage in trading in the

commodities.

Current trends

Most sellers asserted that simsim had in recent years enjoyed exponential price increases.

The leading buyers of simsim

More than a third of produce dealers 42% thought that companies/processors were the major

buyers of simsim followed by foreign traders, retailers and local buyers/end users.

Marketing strategies prevalent for simsim

Good customer care and bulk selling was ranked highly as a prevalent marketing strategy among

simsim dealers. The use of media as a marketing strategy also appealed to a lot to sellers of the

commodity.

Discounting for bulk buyers and the use of posters has proved quite successful in attracting

simsim customers according to the respondents.

The potential customers for simsim

The majority of produce dealers contended that simsim was mostly bought by local consumers.

Others said farmers, foreign traders and companies among others also buy the commodity.

The size of the commodities market

More than half of produce dealers contended that simsim had a big market. The rest still thought

the market was good enough.


16/43

16

The reason for the appeal of sesame

The appeal of simsim products is predicated on good quality, though customer care and display

also play a small part. All produce dealers interviewed were convinced that ensuring good

quality remains the sure option of attracting new customers and keeping old ones.

Room for new entrants in the commodity trade

Almost all the dealers interviewed maintained that the market for simsim was big enough to

support more players. 86% of the dealers interviewed believed they could still become key

players given the opportunity.

Competitors pricing structure

Simsim is priced largely depending on demand but also timing and quantity purchased asserted

most dealers interviewed. Costing in terms of expenses incurred also play an important in the

commodity pricing. In the chart below is a presentation on the prices of simsim across the four

traditional regions of the country in May 2014.

Source: infotradeuganda.com

0 1,000 2,000 3,000 4,000 5,000 6,000

Average

Central

Eastern

Northern

Western

5,100

5,450

5,350

4,750

4,700

4,600

4,700

4,950

4,350

4,000

Price range

R e g i o n s

Simsim prices (per kilo) across Uganda, May 2014

wholesale prices

Retail prices


17/43

17

As can be seen above simsim is a very lucrative enterprise with minimum wholesale price

averaging 4,000/= (western region) and maximum 4,950/= (eastern region). Northern region

recorded the second lowest wholesale price 4,350/= per kilo of simsim. Central region or

Kampala posted the highest retail price 5,450/= in the period, followed by Eastern.

Change in the product offering and marketing strategy

The produce dealers questioned in the assessment were of the opinion that their competitors are

making some major changes in their product offering and marketing strategy. Most dealers of

simsim nowadays put a lot of effort in customer care and market linkages to sell the commodity.

Customer loyalty

More than half of produce dealers were of the opinion that these commodities (i.e. simsim,maize, groundnut, bean and sunflower) attract customer loyalty.

Uniqueness of dealers simsim products

The quality offered and competitive prices were the key factors that mad e most dealers cereal

and pulses products stand out from the rest.

MAIZEBuyers views The majority of buyers 71% interviewed consumed maize products at least once a week which

indicates a good market for the commodity. Some 22% of the buyers consumed maize products

at least once a month. Just 7% of the respondents did not consume maize products at all. 75% of

respondents preferred to have maize in flour form and 25% as grain. The enterprise groups

would therefore get better sales when they grind and package the maize they produce in form of

flour.

The majority of buyers 91% agreed that maize products were always available in their local

market throughout the year. Most buyers 58% purchased their maize products from

retailers/market vendors. The rest bought from produce dealers and farmers. The enterprise


18/43

18

groups should therefore target the retailers/market vendors as their primary clients or even sell

their maize products directly to end users.

Sellers views

Seasonality of market

Many sellers interviewed 73% contended that the market for maize was seasonal. Most say in

May and September which coincidentally are the times when maize are harvested in the country.

This again makes it implausible to assert that maize sells highest in these periods.

Regulations

The sellers interviewed were of the opinion that the product was not restricted by any specific

regulations. Hence there is no legal barrier/costs that must be met for to engage in trading in thecommodities.

Current trends

Maize consumption has remained steady give n that its a staple food for most regions of the

country which promises a stable market.

The leading buyers of maize

Sellers contended that the leading buyers of maize were local buyers/consumers followed by

foreign traders, institutions and farmers respectively.

Marketing strategies prevalent for maize

According to most dealers interviewed, the use of media, flyers, posters and good customer care

were some of the common marketing strategies for maize with the use of posters being the most

successful one.

The size of maize market

More than two thirds of produce traders thought the market for maize was not that high but also

not very low.


19/43

19

The reason for the appeal of maize

Customer attraction to maize products according to produce dealers depends on quality and

display among others.

Room for new entrants in the commodity trade

The sellers were overwhelmingly convinced that market could still accommodate another player

and they could also still be leading dealers of the commodity.

Competitors pricing structured

Maize was priced according to competitors pricing and the quantity purchased. In the chart

below is a presentation on the prices of maize across the four traditional regions of the country.


According to the chart above maize flour attracted the highest retail (2,050/=) and wholesale

(1,850/=) prices across the country in the month of May 2014. Maize grain fetched the highest

0 500 1,000 1,500 2,000 2,500

Average

Central

Eastern

Northern

Western

1,900

1,900

1,800

2,050

1,900

1,650

1,600

1,550

1,850

1,600

1,000

1,150

900

1,000

950

800

850

800

850

750

Price range

R e g i o n s

Maize products wholesale and retail prices across Uganda, May 2014

Maize grain wholesale px Maize grain retail px

Maize flour wholesale px Maize flour retail px


20/43

20

retail price 1,150/= in the central region/Kampala in May 2014 followed by 1,000/= in northern

Uganda.


Dealers intimated that no much movement had been registered in the product offering or

marketing strategy of maize. The products which recorded minimal movement in these areas

have been about packaging, proximity to market and credit sales among others.

Customer loyalty

More than half of produce dealers are of the opinion that these commodities (i.e. simsim, maize,

groundnut, bean and sunflower) attract customer loyalty.

The products uniqueness



BEANS

Buyers views

A quarter of the respondents interviewed ate bean on a daily basis. This corresponds quite wellwith the understanding that the commodity is a staple food in the country. More than three

quarters of the respondents/buyers revealed that they ate bean at least once a week. All but one

respondent would rather have their bean as dried pulses instead of fresh ones.

Two thirds of buyers would buy their bean from retailers and a third from farmers and produce

dealers. The buyers interviewed generally conten d that they dont suffer any bean shortage in the

local at any given time of the year.


The opinions of sellers interviewed were divided on the seasonality of bean market in their local

markets. Two thirds said the commoditys market was seasonal while a third said its not


21/43

21

seasonal. Most sellers 68% said bean sell most at from May to August which like maize is the

period when the harvest occurs

Regulations

The sellers interviewed were of the opinion that the bean sale was not restricted by any specific

regulations. Hence there was no legal barrier/costs that must have been met for one to engage in

trading in the commodities.

Current trends

About a third of the sellers believed that the demand for bean increases markedly around the

planting season. This a period of hunger in most regions of the country and bean provides for a

heavy meal at this needy period.

The leading buyers of bean

The leading buyers of this commodity according to sellers were foreign traders, farmers and

local buyer respectively.

Marketing strategies prevalent for the bean

Good customer care, use of media and attractive design equally stood out as the most used

marketing strategy for bean. This was closely followed by targeting bulky buyers and attention to

quality among others.

The size of bean market

Most of the sellers 57% interviewed were of the opinion that bean market was big whereas the

rest regarded the market as moderate.

The reason for the appeal of bean

Good quality followed by customer care was a major factor in attracting buyers of bean.


22/43

22

Room for new entrants in the commoditys market

Bean dealers believe the bean market is still largely untapped and they can be captains in the

commodity trade.

Competitors pricing

Bean was priced depending on competitors pricing, quantity purchased and the costs incurred in

production and delivery. In the chart below is a presentation on the prices of bean ( Agwede

K131 ) across the four traditional regions of the country.


Common bean ( agwedde 131) attracted the highest prices for both retail 2,800/= and wholesale

2,300/=. This makes Kampala a favorite destination/market for the commodity.



marketing strategy of bean. The products which recorded minimal movement in these areas have

been about packaging, proximity to market and credit sales among others.

Customer loyalty

More than half of produce dealers were of the opinion that bean sales attracted customer loyalty.

0

500

1,000

1,500

2,000

2,500

3,000

Average Central Eastern Northern Western

2,200

2,800

2,050 2,1002,200

1,9502,300

1,850 1,950 1,950

P r i c e r a n g e

Regions

Bean wholesale and retail prices across the countryMay 2014 retail px

whole sale px


23/43

23

The products uniqueness factor

The quality offered and competitive prices were the key factors that make most dealers cereal

and pulses products stood out from the rest.

GROUNDNUTS

Buyers views A sizeable number of buyers 64% consumed groundnut products at least once a week. Just a few

of those interviewed consumed the products daily 13% or not at all 9%. More than a quarter of

buyers questioned consumed the products after a month or more. The majority of buyers

interviewed would prefer to consume groundnuts in the form of pulses 56% rather than paste

44%.

Again most buyers purchased their groundnut products from retailers at markets and shops.

Some of them also bought from produce dealers 29% and farmers 27%.

The buyers unanimously 93% agreed that groundnut products were available all year round in

their local market which indicates good supply levels.

Sellers views

Seasonality of market

Sellers were equally split on the seasonality of groundnut market. More than a third believed it

was not seasonal whereas about two thirds thought otherwise. A third of those who believed its

seasonal contends that the product sold highest around June.

Regulations

The sellers interviewed wer of the opinion that the products (cereals and pulses in the study)

were not restricted by any specific regulations. Hence there was no legal barrier/costs that must be met for to engage in trading in the commodities.


24/43

24

Current trends

Groundnut was by the time of the assessment turning out to be a reliable cash crop among

farmers given its relatively high prices according to produce dealers.

The leading buyers of groundnut

Processing companies stood out as the leading buyers of groundnuts according to produce

dealers. This was followed by retailers and foreign traders.

Marketing strategies prevalent for groundnut

Targeting bulk buyers followed by use of media and attractive designs stood out as the most

prevalent marketing strategy for groundnut.

The size of the commodities m arket

The majority of produce dealers contended groundnut had a moderate to high market in terms of

number of customers and revenue.

The reason for the appeal of groundnut

Good quality remained the most important factor why customers keep coming back for

groundnuts

Room for new entrants in the commoditys market

In the same way as for bean and maize, produce dealers were of the opinion that the Groundnut

and Sunflower market was up for grabs and that they could still become major players in the

commodity trade.

Competitors pricing

Pricing for this commodity depended on costs incurred in its production and delivery and the

quantity purchased. In the chart below is a presentation on the prices of groundnut (per kilo)

across the four traditional regions of the country.


25/43

25


Northern and western regions posted the highest retail price 4,500/= for groundnut. These

regions are also the highest consumer of groundnut products. Northern region also registered the

highest wholesale price 4,000/= across the country in May 2014.



marketing strategy of the products which recorded minimal movement in these areas have been

about packaging, proximity to market and credit sales among others.

Customer loyalty

More than half of produce dealers were of the opinion that these commodities (i.e. simsim,

maize, groundnut, bean and sunflower) attracted customer loyalty.


The quality offered and competitive prices were the key factors that make most dealers of cereal

and pulses products stood out from the rest.

3,200

3,400

3,600

3,800

4,000

4,200

4,400

4,600

Average Central Eastern Northern Western

4,4004,300 4,300

4,500 4,500

3,900

3,750

3,9504,000

3,950

P r i c e r a n g e

Regions

Groundnut wholesale and retail prices across Uganda, May2014

Retail price

Wholesale price


26/43

26

SUNFLOWER

Buyers views A significant number (37%) of buyers did not consume sunflower products, some 17% consume

sunflower products frequently (Daily or weekly) and 47% consume the products after extended

periods of time (a month or more).

Most of the consumers (71%) of sunflower products buy them from farmers; others (24%) buy

from produce dealers and 5% representing just one consumer buys from market stalls.

Consumers had a divided opinion on the availability of sunflower products in their local market,

the majority 36% contended that it was always available, others 28% thought its there only in

specific seasons another 28% thought its rarely available.


Most of the sellers interviewed abstained from the question on the seasonality of sunflower

because sunflower products are not among their main dealership commodities.

Regulations

The sellers interviewed are of the opinion that sunflower sale is not restricted by any specific

regulations. Hence there is no legal barrier/costs that must be met for to engage in trading in the

commodities.

Current trends

Most of the produce dealers who commented (6 out of 30 respondents) on Sunflower thought the

commodity had a relatively high demand among buyers.

The leading buyers of sunflower

The few produce dealers who commented on this item expressed that its the local retailers

awarawara who were its chief buyers.


27/43

27

Marketing strategies prevalent for sunflower

As in the case of groundnut targeting bulk buyers is a strategy commonly used by produce

dealers to sell Sunflower. This is supported by ensuring good quality products for the customers.

The size of the commodities market

Interestingly many produce sellers 57% are of the opinion that the market for sunflower is

moderate to small. This is telling of the fact that the commodity might not be such a good choice

for the farmer groups under Child Fund.


Dealers intimated that no much movement has been registered in the product offering or

marketing strategy of the above products. The products which recorded minimal movement in

these areas have been about packaging, proximity to market and credit sales among others. In the

graph below is a presentation on the prices of sunflower (per kilo) across the four traditional

regions of the country.


0 200 400 600 800 1,000 1,200

Average

Central

Eastern

Northern

Western

1,050

650

1,100

1,100

1,000

950

600

1,000

1,000

800

Price range

R e g i o n s

Sunflower prices (in kilos) across the country, May2014

wholesale prices

Retail prices


28/43

28

Northern and Eastern Uganda fetched the highest retail 1,100/= and wholesale 1,000/= prices

across the country. Remarkably, Central region/kampala posted the lowest retail and wholesale

prices for the commodity.

Customer loyalty

More than half of produce dealers interviewed were of the opinion that these commodities (i.e.

simsim, maize, groundnut, bean and sunflower) attract customer loyalty.

The product s uniqueness factor



PORK

Buyers views A sizeable number of buyers (one fifth) interviewed did not eat pork products which can be

attributed religious, cultural or personal preference/dictate. Uganda boasts a fairly large Muslim

population who by their faith are prohibited from consuming the product. Just one of the buyers

interviewed conceded that he/she ate pork products daily. However a third of buyers interviewed

ate pork products at least once a week. Almost a half of respondents consumed the products justonce after a month or more.

Most buyers 65% purchased their pork products from pork joints located in their neighborhoods.

A third of consumers interviewed bought their pork from other dealers or farmers. All the

respondents admitted that pork was always available in the local stalls whenever they needed it.

Sellers views Seasonality of the product

Porks market was all year round according to the dealers.


29/43

29

Regulations

Dealers were split on the availability of regulations for dealing in pork products but they

generally asserted that there was no major regulation with the exception of regular checks of

weighing scales and trade licensing.

Market growth

Dealers were united in asserting that the pork market was exponentially growing

Current trends

The dealers interviewed were of the opinion that pork was sold at a high price.

Leading sellers of pork

The leading sellers of pork products according to the dealers interviewed were butchers and other

foreign companies with related investments in Uganda

Marketing strategies available for pork

The dealers highlighted customer care and quality products were some of their common

marketing strategies

The market size of pork products

Most dealers interviewed 58% were of the opinion that the pork market is high to moderate.

The products appeal

Most dealers 67% asserted that the key appeal for pork products were fair prices and good

hygiene respectively. They were of the opinion that these appeal factors would stay around for a

long time.


30/43

30

Room for new entrants in the commoditys trade

The port market according to 83% dealers was still largely untapped hence capable of supporting

new players. Many of the dealer in the assessment thought they could as well become key

players in the commodity trade.

The same market situation applied for piglets which the dealers asserted also had a huge market

and they too could become major players in its trade.

Rival dealers/competitors in pork products trade

Pork was mostly sold by local pork butchers and occasionally local farmers who then sold the

meat to end users including hotels and restaurants and local grillers for further value addition.

Farmers had at times out sold pork butchers because their pork suit customer needs in terms ofweighing and hygiene.

The commoditys pricing

Most dealers priced their pork depending on the current market price, discount price for bulk

purchases and the demand. In the chart below is a presentation on the prices of pork (per kilo)

across the four traditional regions of the Uganda.

0 2,000 4,000 6,000 8,000 10,000

Average

Central

Eastern

Northern

Western

7,800

8,150

7,150

7,400

8,400

6,650

6,300

6,450

6,350

7,150

Price range

R e g i o n

Pork wholesale and retail prices (per kilo) across Uganda

wholesale price

retail price


31/43

31


Western and Central regions recorded the highest retail prices 8,400/= and 8,150/= respectively

across the country in May 2014. The wholesale price were fairly equal across the region,

averaging 6,650/= except for western region which was at 7,150/=.


Most dealers believed there had been no significant change in the commodity offering by dealers

rather than

selling it at a reduced price at times and ensuring its available all the time.

Customer loyalty

Most dealers 67% were of the opinion that there was customer loyalty by pork buyers especially

when their needs for quality, reliability, size and price are met.


Ensuring good quality followed by competitive pricing were critical factors for the uniqueness of

many pork dealer enterprises.

PIGLETSSeasonality of the commoditys market

Piglets were equally not a seasonal commodity but rather sell all year round.

Regulations

Piglet dealers were also unhindered by any major regulation except for the routine health checks.

Market growth

Just like pork, piglets market was also booming as expressed by most dealers interviewed in the

assessment.


32/43

32

Current trends

Like pork, dealers thought piglets were in high demand currently.

Leading sellers

The study also noted that the leading sellers of piglets were butchers and local farmers

Market size

The piglets market size was regarded by the dealers in this study to be moderate to high.

The appeal for piglets

Dealers 86% also believed the appeal of piglets was on their quality (breed, size, and growth

rate) and price. They also thought these appeal factors would obtain for a long time.

Room for new entrants in the co mmoditys trade

The pork market according to 83% dealers was still largely untapped hence capable of

supporting new players. Many of the dealers in the assessment thought they could as well

become key players in the commodity trade.

The same market situation went for piglets which the dealers asserted also had a huge market and

they too could become major players in its trade.

The commoditys competitors

Piglets were mainly sold by breeders and occasionally by local farmers.

The appeal for piglets

Pricing was a prerequisite for customer appeal in piglet trade.

The commoditys pricing

Most dealers priced their piglets depending on the current market price, discount price for bulk

purchases and the demand.


33/43

33


Most dealers believed there had been no significant change in the commodity offering by dealers

other than

selling it at a reduced price at times and ensuring its available all the time.

Customer loyalty

Dealing in piglets also generated some customer loyalty according to 67%

dealers/farmers/breeders interviewed.

HONEY

Buyers views Most buyers interviewed (57%) consumed honey products after extended periods of time. This

depicts the low supply of the commodity in the market. 33% consumed the product at least once

a month which denotes a very low level of consumption. 10% do not consume honey at all for

one reason or another.

The majority of the current consumers interviewed would prefer to eat honey in its crude form

just a few would rather have honey in a purified form. Farmers dominate (72% of the time) the

supply of honey products to the current consumers, implying the enterprise groups can deal

directly with the end users of the product.

Most buyers 53% contended that honey products were always available in their local markets

though a similar number 47% thought otherwise.

Sellers views Seasonality of the product

Most dealers 67% thought the product s market was seasonal. Honey is harvested twice a year

with the first one being the main season.

Regulation


34/43

34

There was no particular regulation hindering trade in the commodity. Dealers were of the view

that the commodity market was growing.

Current trend of honey products

Currently honey products have enjoyed high prices and demand and an increasing rate of

consumption among the aged. Both beekeepers and processors were known to deal in honey

products. In the chart below is a presentation on the prices of processed honey (per kilo) across

the four traditional regions of the Uganda.


Processed honey fetched the highest staggering price of 15,000/= and 18,000/= for retail and

wholesale respectively in the period. The average retail and wholesale prices of processed honey

across the country were 10,850/= and 12,950/= respectively.

The leading sellers of honey products

0 5,000 10,000 15,000 20,000

Average

Central

Eastern

Northern

Western

12,950

11,500

11,400

18,000

15,000

10,850

10,000

10,600

15,000

10,850

Price range

R e g i o n s

Wholesale and retail prices of processed honey across across Uganda in May 2014

wholesale px

Retail px


35/43

35

Beekeepers and processors have an edge in honey product trade because they control production

and advertize extensively, respectively. Most dealers advertize through product labeling and the

local media.

Main customers

The dealers interviewed sold the bulk of their honey products to end-users/households but also to

shop owners, foreign buyers and companies.

The appeal for honey products

Significantly dealers thought everybody loves honey, so there is ready market. The other pull

factors for honey products include being natural/organic and branding. The dealers were

unanimous in asserting the factors would remain for a long time.

Competitive Analysis

Apparently the dealers interviewed thought the market can support new players of which they

could be key. The other important dealer in honey products was supermarkets according to the

respondents.

Quality and packaging stood out as the main pull factors for honey product buyers.

Customer choice

When selecting honey products customers first and foremost consider the products price,

followed by quality and reliability. In the chart below is a presentation on the prices of processed

honey (per kilo) across the four traditional regions of the country.

Customer loyalty

Honey products dealership tends to create a ve ry high customer loyalty according to the all

dealers interviewed.

Packaging style and quality were the main factors that set apart the various honey product

offerings on the market.


36/43

36

CHAPTER IV

CONCLUSIONS AND RECOMMENDATIONS

Simsim Most buyers prefer their simsim in grain form implying the need for a gradual uptake of

value addition by local farmers including the farmer groups under the HEEC project.

Simsim market is available through the year hence producers can hoard the commodity until

such a time when the prices are good enough.

There has been an exponential increase in the price of simsim recently making it a

commodity of choice for the agri-business farmer. The assessment noted that the price of

simsim is very fluid (tending up-wards) with change in demand.

The findings indicate that simsim is mainly bought by foreign traders and processors which

make it recommendable to sell it directly to these parties for better prices rather than through

middlemen.

Good quality is an important factor in selling simsim. Producers therefore need to ensure

value addition, right from drying to sorting and packaging.

The market for simsim is vast, both local and foreign. New producers and dealers still have

enough room to join the commodity trade.

Local farmers should sell their simsim to regions with higher wholesale prices like easternUganda followed by central/Kampala and may be northern but not western Uganda which

seems to traditionally have a low preference for simsim products. However, farmers should

factor in the delivery costs (transport) as they move to sell in these markets. Selling simsim at

retail price appears to be lucrative but handling costs need to be considered before farmers

engage in it.

Access to market information and formation of cooperatives/associations seem particularly

advisable for dealers and producers of simsim since the most paying markets are far and wide(overseas, Kampala and Eastern region)

Maize Maize is a staple food for most Ugandans especially in the north where the prices for maize

products (flour and grains) are particularly high. Consumers prefer maize in the form of flour


37/43

37

hence the need for value addition. The market for maize products is also largely found in the

northern region.

The target farmers should therefore add value to their maize grain so they can fetch better

revenue by selling the flour locally in northern Uganda.

Maize being a staple food for most people in the country implies a stable market for the

commodity.

Maize products are not very pricy compared to other commodities like simsim making it a bit

of a low earner for the business farmer.

Beans Like maize, bean is also a staple food and a good percentage of those interviewed consumed

it daily. This makes bean market quite promising in the country. Farmers can as well sell

their bean produce to institutional buyers like schools, prisons and the army among others.

The study noted that bean supply is adequate which leaves bean producers with a few options

to ensure that they sell their bean i.e. customer care and ensuring high quality standard.

Bean has a good market in Kampala, attracting comparatively high prices. Business farmers

in the district therefore need to sell their bean produce there by creating market linkages and

associations for the purpose of efficiency.

Not much change has been registered in bean trade except for some efforts made towards

packaging and making of credit sales.

Groundnuts Buyers are not so selective about the form (as in pulses or paste) in which they would have

their groundnuts. This implies a low need to take up value addition for the commodity in

terms of grinding the pulses into paste.

The groundnut market is seasonal i.e. around June. Producers would therefore serve their

businesses right by selling the commodity around this time.

Groundnut is a top earning enterprise which if chosen/ventured into by farmers would likely

generate for them adequate income to sustain their households and improve their standards of

living.


38/43

38

Like for the sales of all commodities, quality is important in marketing groundnuts and that is

what keeps customers coming back. Producers and dealers would therefore do well to ensure

that their g/nut is well dried, sorted and packaged before they put it up for sale.

Groundnut has better markets in northern and western Uganda. Farmers and producers

should therefore look towards marketing their groundnut products in the local market hence

avoiding needless handling costs in delivering their products to the central region

Sunflower Sunflower is not a favorite commodity among Ugandan buyers and would not be such a wide

choice for business farmers according to the assessment.

Sunflower unlike other pulses is not commonly found in produce stores and market stalls

being sold to would be buyers. Buyers would buy sunflower cooking oil like any other with

no special demand attached to it. This makes sunflower as an enterprise choice for the

business farmer rather flat.

Very low demand and price was recorded for sunflower in the central in the assessment.

Given the high purchasing power of people in the central region and the high population

density there, the commodity should have registered high demand and prices if it was really a

favorite. Clearly its not a commodity that would generate a lot of revenue for the local

investor. Hence care should be taken when attempting to adventure into its production.

Pork Pork is a target commodity with a niche market. Consumers normally have pork occasionally

as a treat making the commodity a non regular fixture on the buyer menu. Farmers/producers

should therefore identify their niche market for pork and ensure optimal supply to that

market.

Pork sells every time of the year making it possible for producers to be active and generate

revenue all year round. Farmers/producers should therefore take up the enterprise knowing

full well that they can engage in constant production and still sell their commodity. Making quality sales is crucial in pork marketing though the study notes that most pork

dealers do their business in unhygienic marginal locations which pose a health risk to the

buyer. Making a change in this area would great enhance the sale outcomes of pork dealers

hence better revenues.


39/43

39

Pork prices vary widely depending on demand and the quantity of purchases made. This

therefore implies that the business farmer can/should deliberately choose who to sell the

pig/pork to i.e. the highest bidder for better sales revenue.

Local dealers sell pork better in fried form as a full meal in what is commonly known as pork

joints. Farmers should therefore consider selling their pigs/pork via this means, as it promises

a quicker turn over and higher sales revenue.

Piglets Piglet enterprise is very lucrative and easier to manage than piggery/pork. A piglet can be

sold at a third of the price of a grown pig. By simple ranking piglet enterprise would be better

than pork/pig rearing enterprise.

Pricing is everything for a piglet breeder to make a sale. Farmer need to be careful in setting

their prices by considering the start-up costs, working capital and delivery/handling costs

among others.

Piglet prices vary according to the breed of pigs in question. The business farmer would be

well advised to choose their breed carefully. Breed such as the large white can go for

150,000/= a piglet.

Honey Honey is an exotic commodity not consumed regular by Ugandans. This is partly explained

by the scarcity of the delicacy. This implies a huge market opportunity for those who would

like to engage in honey production.

Honey is the most valuable of all the enterprises reviewed in this study. The business farmer

would have made a very good choice by electing to invest in the product.

Honey is not always available in the local Ugandan market. Implying an opportunity to fill

the supply gap and good revenue by those who choose to undertake the apiary venture.

Processed honey greatly enhances the commodity value and appeal hence the need for value

addition Honey products from Uganda especially the northern region is world renown. This offers a

ready market for those intending to engage in the commodity production.


40/43

40

REFERENCESMarket assessment and baseline study of staple foods-Country report Uganda 2010, USAID,

Chemonics International Inc.

Infotrade, May 2014, Current Prices for the week, Average Commodity Prices, viewed 10 May2014, < http://www.infotradeuganda.com/index.php/market-information/food-prices.html >

USAID (2008), Stabilization-Driven Value Chain Analysis of Rice, Groundnuts and Maize in Northern Uganda, October 2008;

NRI/IITA (2002), Transaction Cost Analysis Report.

ASARECA (Association for Strengthening Agricultural Research in Eastern and Central Africa)2008. Responding to the food price crisis in Eastern and Southern Africa: Policy options fornational and regional action. ASARECA, Entebbe.
http://www.infotradeuganda.com/index.php/market-information/food-prices.htmlhttp://www.infotradeuganda.com/index.php/market-information/food-prices.htmlhttp://www.infotradeuganda.com/index.php/market-information/food-prices.html


41/43

41

ANNEX I

BUYERS (CONSUMERS/END-USERS)

(Market shoppers-10 and farmers-4)

Introduction

This is a Child Fund sponsored market assessment for enterprises/products identified by farmer groupscurrently being supported under its Household Economic Empowerment HEEC project in the Acholisub-region. The information you will offer will help to make these enterprises more effective andbeneficial to the vulnerable groups being supported by the organization. You are free to participate in orabstain from this exercise should you desire so. The information you provide shall be kept strictlyconfidential and no harm will arise to you as a result of your participation in the research.

Demographic information

I. Sex Male FemaleII. Household size

III. DistrictIV. Sub/county, Town, municipality or cityV. Local market

The product

Qn 101 How often do you buy these products?

S/NO PRODUCT CONSUMPTION RATE

Never Daily Weekly Monthly After long

periods

1. Sesame/sim sim

2. Maize

3. Bean

4. Groundnut

5. Pork

6. Piglets

7. Honey

8. Sunflower


42/43

42

Qn 102 In what form/type, period and size would you like to have this product from any given seller?

S/NO Product Form/type Period (daily,weekly,fortnightly,monthly, more..)

Size (kg/liter)

1. Sesame/sim sim

2. Maize

3. Bean

4. Groundnut

5. Pork

6. Piglets

7. Honey

8. Sunflower

Qn 103 From which sellers do you often buy these products? (Start with the commonest seller for eachcommodity)

S/NO PRODUCT DEALER (S)

1. Sesame/sim sim

2. Maize

3. Bean

4. Groundnut

5. Pork

6. Piglets

7. Honey

8. Sunflower


43/43

Qn 104 What is the availability of the following commodities in your local market?

S/NO PRODUCT Always Seasonally Rarely Not available

1. Sesame/sim sim2. Maize

3. Bean

4. Groundnut

5. Pork

6. Piglets

7. Honey

8. Sunflower

Qn 105 What has been the price trend of these products in your local market?

S/NO PRODUCT/Kg 2012 2013 2014

1. Sesame/sim sim

2. Maize

3. Bean

4. Groundnut

5. Pork

6. Piglets

7. Honey

8. Sunflower

THANKS FOR YOUR COOPERATION

final report cfi market assessment

Documents