Cocoa exporters in Uganda have called for government’s intervention in order to access European markets. Majority of the traders have failed to take advantage of the stringent external market over costly certification, thus demanding subsidies.
To acquire certification to export to European countries, about $20,000 (Shs74 million) is required. Thus, without the costly organic and fair trade certificates, many traders are forced to go through third party agents and miss out on the premium price usually.
Although the Uganda National Bureau of Standards (UNBS) was accredited by the International Organisation for Standardisation (ISO) to carry out organic tests on the products, certification remains with the European Union-accredited companies.
“Expensive certification mostly the organic type has rendered many of us uncompetitive even when the market is available,” Business Development Director of Native Group of Companies, Edrisa Sserunkuuma, said at the third annual exporters’ conference.
Sserunkuuma, who has been in the cocoa export business for the last seven years, now trades indirectly through a British company because of the costs.
In response to the plea, Uganda’s Commissioner for External Trade, Silver Ojakol, explained that certification is costly because it comes from outside the country.
“Internally, Uganda does not have the capacity to handle this type of certification. Until we reach that capacity, they will continue to incur the costly services,” Ojakol said, urging exporters to work together with government agencies to find funding and develop the country’s capacity to undertake certification locally.
While the country’s Trade Minister, Amelia Kyambadde, revealed that the government is coming up with the export development fund which the ministry will lobby for finances to sort such challenges.
“As we wait for this issue to be sorted, you should also consider adding value to the commodity because there are investors who would like to partner with them to add value.”
Few farmers in the country grow cocoa as most think the crop is not economically viable. Uganda has an estimated 20,000 hectares of land under cocoa cultivation, mostly in the country’s west and central regions and the crop supports about 60,000 households.
Records from Bank of Uganda for 2018 show that the country exported cocoa worth $64 million (Shs236b), up from $54million (Shs199b) earned in 2017.