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Limited production ability obstructs Rwanda's export growth

Friday August 14 2015
RwandaCoffee

Coffee is the leading Rwanda’s export product. PHOTO | FILE

Lack of production capacity has limited the volumes of Rwandan exports despite availability of opportunities in the international market.

Although regional and international export markets are opening up for Rwandan products, there is still low investment in new export chains such as horticulture.

“We still have limited investments; there is also a need for specialised skills to enhance production. There is demand for our products but, we still have gaps to fill especially in horticulture,” said Charles Balinda, a tea processing officer at the National Agriculture Export Board (NAEB).

Despite the challenges and low export value, exports have grown over the past few years, thanks to increased list of products.

Traditional export products were coffee, tea and pyrethrum.

The total value of exported agricultural commodities increased from $158 million in 2010 to $217 million in 2014, a 37.6 per cent growth.

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Export of non-traditional exports continued to show positive signs with their share moving from 28 per cent of total agriculture exports in 2010 to 47.3 per cent in 2014.

According to data obtained from NAEB, the highest increase in agriculture exports was realised in livestock products, which moved from $25 million to $62.5 million, followed by grains and flour, which moved from $16 million in 2010 to $35 million in 2014, representing a 113.8 per cent growth.

The exports of traditional export crops have also continued to grow from last year. According official figures, 15,622 metric tonnes of coffee have been exported, fetching $42.7 million over the first eight months of this year.

For horticulture, 18,893 metric tons have been exported, generating $4,233,151.

Despite relative growth, coffee which is the country’s biggest export has suffered from price fluctuations on the global market, depressed demand across other markets and low valuations.

Bill Kayonga, chief executive of NAEB, says although prices this year have been unpredictable, farmers may not be affected due to the fluctuation.

“Our coffee is not benchmarked against the New York price, we are fortunate enough that most of our exporters will be able to enjoy price differentials,” he said.

There have been concerns that Rwandan coffee farmers will be affected by the weakening franc against the dollar, which he said will not be the case; instead, there is a likely gain by farmers.