Evaluating the Marketing Opportunities for Banana & its ... - Foodnet

Evaluating the Marketing Opportunities for Banana & its Products
in the Principle Banana Growing Countries of ASARECA
(Uganda)
J.S. Spilsbury
J.N. Jagwe
R.S.B. Ferris
November, 2002

Table of Contents
Table of Contents 2
List of Figures 3
List of Tables 3
Executive Summary 4
1 INTRODUCTION 6
2 METHODOLOGY 6
3 SUB SECTOR ANALYSIS 6
3.1 Rapid Overview Of The Economic Status Of The Countries 6
3.2 Trade And Competitiveness: Recent Reforms, Performance 7
And Market Access
3.3 Types Of Banana 7
3.4 Production Zones 9
3.5 Production Levels 11
3.6 Importance Of The Sub-Sector To Earnings, Rural Livelihoods, 12
Poverty Alleviation And Economic Growth
3.7 Consumption 13
3.8 Production Constraints 14
3.8.1 Soil fertility 14
3.8.2 Pests and Diseases 14
3.9 Marketing Constraints 17
4 DEMAND ANALYSIS 20
4.1 Size of National Markets 20
4.2 Size and Growth Rates of Regional Markets 22
4.3 Size and Growth Rates of World Markets 24
4.4 Market Price Trends 25
4.5 Major Products 27
4.6 Overview of Market Potential for Banana and Banana Based Products 29
5 SUPPLY ANALYSIS 33
5.1 Analyse of the supply chain 33
5.2 Market Linkages 36
5.3 Production costs 37
5.4 Trading Costs and Margins in the Supply Chain 37
6 MAJOR FINDINGS 41
7 RECOMMENDATIONS 44
Information Gathered with Businesses involved in Banana Markets 50
References 53
Appendix 56
2

List of Figures
Figure One Production of Matooke by Region 10
Figure Two Volume of Ugandan Exports of Apple Banana and 22
Bogoya Exports to Kenya
Figure Three Value of Ugandan Exports of Apple Banana and 22
Bogoya Exports to Kenya
Figure Four Fresh Matooke and Apple Banana Export Volumes 24
Figure Five Real Retail Prices for Selected Commodities (Kampala) 25
Figure Six Grand Seasonal Index from Kampala Matooke Retail Prices 26
Figure Seven The Banana Supply Chain 33
List of Tables
Table One Ugandan Banana Area Planted and Production Level 11
Table Two Ugandan Banana Production (Tonnes) 12
Table Three Crop Area, Plot Number and Size 12
Table Four Percentage of Staple Food Consumption as a Percentage 13
of Household Monthly Consumption
Table Five Volume and Market Values For Three Main Kampala Markets 20
Table Six Combined Present and Future Volumes for Three 21
Main Kampala Markets
Table Seven World Markets for Banana and Plantain 24
Table Eight Approximate Kampala Prices of Local Waragi 27
Table Nine Approximate Kampala Prices of Tonto 28
Table Ten Correlation Coefficients for Matooke Prices in Selected Towns 36
Table Eleven Gross Margins Under Hired and Family Labour for Matooke 37
Table Twelve Trading Costs and Margins 38
3

Executive Summary
This report provides a review of banana production, processing and marketing in
Uganda. The report specifically explores the current market status and investment
options for the sub-sector. Market coverage includes banana and banana-based
products in local, regional and international markets. This Ugandan study represents
one component of a regional initiative that includes Tanzania, Kenya, and Rwanda.
The methodology employed by the study was based on a rapid assessment technique
using primary and secondary data. Primary data has been obtained through interviews
with producers, traders, retailers and exporters. Secondary data was acquired by
literature review and the collection of available statistics.
Major findings include evidence for continuing shifts in the location of matooke
production. New areas are planted further to the south and west of Uganda increasing
transport distances to urban consumption centres. In established production areas
planting is moving away from main roads increasing reliance on muram tracks that
become difficult to use in the wet season. The main reason for production area shifts
is declining soil fertility. Additional production constraints are weevils, nematodes
and black sigatoka. Fusarium wilt is a major threat to sukali ndizi and bogoya (Gros
Michel) production and hence a deterrent to investment in these dessert bananas.
Analysis of net and gross margins for supply chain participants reveals that brokers
who organise transport from rural to urban areas can make attractive daily incomes.
Price peaks for the food staple matooke are found in April and December as demand
increases with Easter and Christmas festivals. Farmers show little or no production
response to these predictable and significant price movements.
Regional export opportunities appear for matooke in Rwanda and for dessert varieties
to Kenya.
International banana markets appear as increasingly competitive. Recent changes in
European Union banana policy reducing preferential access are seen to further
increase competition. Within this context market potential for Ugandan bananas is
seen in markets segments including organic or health focused fruit and ‘naturally’
solar dried dessert bananas. Sales of matooke to Europe have almost doubled in the
past five years with potential seen for further increase. However exports of fresh
sukali ndizi to Europe have declined due to quality issues. European markets require
sukali ndizi to have large unblemished fingers of uniform ripening and size. If these
quality requirements can be achieved European market prices appear as attractive.
Recommendations highlight the importance of addressing soil fertility issues to
guarantee sustainable production systems. Further research is suggested to better
establish what changes in soil fertility status are occurring and to determine why
farmers do not manage soils in a sustainable manner through recognised soil
management practices.
Continued research and support to extension in encouraging better pest and disease
cultural control is suggested for weevils, nematodes and black sigatoka.
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To reduce excessive margins existing within the market chain the involvement of
government is recommended to find ways of reducing informal collusion between
brokers, which may lead to the restriction of new entrants into the broker role.
Provision of gross and net margin information to potential entrepreneurs is suggested,
as is contact with micro finance providers to ensure potential new entrants can access
credit. In urban markets efforts should be made to allow sufficient space for retailers.
This is seen to be increasingly important as significant volume increases are expected
with the increasing urbanisation of a growing population.
Recommendations are made to maintain and improve roads and reduce theft
especially in rural areas.
To increase farm incomes, improve consistency in monthly volumes and reduce
consumer price peaks development of a production response to seasonal price
variation is recommended. Further research into the timing of planting new gardens,
timing of de-suckering to control new growth and the use of appropriate irrigation
systems to control water stress that stimulates fruiting is suggested.
To support regional exports of matooke to Rwanda and dessert varieties to Kenya the
provision of regional market price information using mediums currently giving
Ugandan price information is put forward.
Recommendations for the involvement and lobbying of regional governments to
reduce border barriers including tariffs with efforts to ensure quick and efficient
boarder crossing are made.
On international markets focus is given to health focused naturally dried dessert
banana markets, exports of fresh organic sukali ndizi and the further growth of
matooke markets in Europe. Recommendations include better design of product
packaging to compete in snack and sweet market outlets and improving the
appearance of naturally dried banana through better drying techniques with plant
breeding for visual characteristics.
To improve the quality of fresh sukali ndizi destined for international markets further
research is recommended into the control of fruit ripening after harvest by exploring
post harvest packaging and temperature control. This research should actively involve
private sector exporters. In addition improvement of fruit handling through out the
supply chain is forwarded by use of capacity building approaches with fruit handlers.
Further research is suggested to determine possibilities for further expansion of
matooke sales in European markets particularly into UK based West Indian and
Belgium based Congolese ethnic markets.
To benefit all Ugandan fresh fruit and vegetable exports it is suggested that the Civil
Aviation Authority and relevant government representatives are encouraged to
facilitate competition in the airfreight market and ensure efficient airport freight
administration and handling. This report should be used as a lobby tool to emphasis
the importance of Entebbe airport in the export of fresh fruit and vegetables.
5

1 INTRODUCTION
This report represents one output from a regional banana study that includes Tanzania,
Kenya, and Rwanda. The purpose of the study is to provide a review of the current
status and investment options for the banana sub-sector. To achieve this the project
reviewed market segments that include:
(i) Fresh cooking bananas
(ii) Dessert bananas
(iii) Processed banana fruit products
(iv) Non-food banana based products.
The market coverage includes local, regional and overseas markets. An important
element of the work is to examine the comparative and competitive advantages of
specific products both spatially and in terms of economic gain based on investment.
2 METHODOLOGY
As with the other commodity studies in this series the methodology is based upon a
rapid assessment technique developed by Holzman (1995). Due to it’s rapid nature the
review is illustrative as opposed to rigorous. It uses both secondary and primary data
to determine the market prospects for bananas and banana products. Primary data has
been obtained through limited interviews using a structured informal questionnaire
(see appendix one) with producers, traders, retailers and exporters (see appendix two).
Secondary data was acquired through literature review and the collection of available
statistics.
The report begins with a broad overview of the economic situation of Uganda. It then
examines production zones, the importance of the sub-sector, principle production and
marketing constraints, demand and supply side analysis and the medium and long
term market outlooks across the sub-sector, for national, regional and export trade.
Major findings are summarised with recommendations made in the form of suggested
ways forward.
3 SUB SECTOR ANALYSIS
3.1 Rapid Overview Of The Economic Status Of The Countries
Uganda’s per capita GDP measured in constant prices has risen by an average of 3.2
% per annum from 1990 to 2000 (Collinson et al 2000). The countries population of
24 million people is growing at approximately 2.5% per annum. Therefore it is
suggested that food demand will continue to rise through both a population and
income effect.
Urbanisation is occurring with 16% of the population living in urban areas in 2000
and forecasts predicting this will rise to 22% by 2010 (Collinson et al 2000). An
increasingly urban population will lead to higher volumes of bananas being
transported from rural to urban areas. Requirements placed on road infrastructure and
transport vehicles will rise as will the need to deal with banana related refuse in major
cities.
6

3.2 Trade And Competitiveness: Recent Reforms, Performance And Market
Access
The main dessert banana exporters to world markets are the Caribbean, Central and
South America countries that supply importers in North America and Europe. These
exporters have a comparative advantage over East African producers due to
production economies of scale and lower sea based transportation costs.
Two of the main European consumers are the UK and Germany. The UK traditionally
buys bananas from the Caribbean while German purchases from Central and South
America.
Banana imports to the European Union are influenced by the Cotonou agreement,
which replaced the Lome Convention in February 2000 after a lengthy dispute with
the USA. The Cotonou agreement substantially altered Lome banana protocol
arrangements, which had given preferential access to EU markets for Africa,
Caribbean and Pacific (ACP) country bananas. Since the signing of the Cotonou
agreement the EU has made special provisions for Least Developed Countries under
an ‘Everything but Arms’ measure. This amends the EU General Scheme of
Preferences to extend duty free access to all LDC imports. For bananas this will be
phased in with a gradual reduction of import tariffs on fresh bananas to zero by
cutting the tariff rate by 20% every year between 1 st January 2002 and 1 st January
2006 (P. Robbins and S. Ferris 2002). Chiquta are currently looking for possible
production sites in African Less Developed Countries from which to supply European
Union markets.
Potential is seen for Uganda to benefit as an LDC from tariff reductions for fresh
bananas exports to the EU under the ‘Everything but Arms’ measure. However, the
removal of preferential access arrangements under the Cotonou agreement is seen to
place pressure on some ACP countries to improve their competitive strength in
bananas and find new market outlets. These pressures will be felt most by Caribbean
countries whose economies rely heavily on banana exports to Europe. International
markets for banana products such as flours, fibres and essences could therefore
become increasingly competitive.
The past disputes over Lome and bananas is seen to relate to protection of former
traditional colony based supplies and European attitudes to genetically modified
foodstuffs. European consumers are cautious with regard to the way their food is
produced. This stems from a background of food scares, salmonella, botulism and
most notably the BSE crisis.
With reference to fresh fruit a number of trends in European consumer demand have
been distinguished by (Abbenhuijs 2001). These include rising consumption trends
for food perceived as being healthy, organic food and food produced in an
environmentally conscious manner. These trends would appear to offer potential for
Ugandan banana producers who currently use largely organic methods of production.
7

3.3 Types Of Banana
Rubaihayo (1993) classified four major types of bananas as cooking, brewing,
roasting and dessert types. Production in Uganda is dominated by the East African
Highland cooking banana (Gold et al 2002), which includes both cooking (‘matooke’)
and brewing (‘mbidde’) types.
Cooking Bananas (Matooke)
The mature fruits are harvested when green. They are peeled, boiled or steamed and
can be mashed before eating. This group constitutes the majority of the East African
Highland Bananas (AAA-EA group).
Brewing bananas (Mbidde)
The fruit is harvested when mature, ripened and squeezed to produce juice that is
fermented with sorghum to make beer. Beer bananas are found in the AAA, AB and
ABB groups. Farmers plant brewing types where soil fertility has declined.
Interviewees suggested the increasing numbers of brewing bananas particularly seen
at roadsides are an indication of reductions in matooke yields.
Roasting bananas
These belong to the plantain (AAB) group. The fruit is harvested and ripened before
roasting and eating.
Sweet (Dessert) bananas
These are eaten when ripe. Those commonly found are sukali ndizi (AB group, also
known as the apple banana), gros michel (AAA group) and cavendish (AAA group).
As Lynam (2001) points out the marketing of these fruit (dessert) types is more
exacting that cooking types because of increased importance of bruising to fruit
quality during the ripening process.
8

3.4 Production Zones
Matooke production is primarily in the southwest of the country focused around
Mbarara and Masaka as shown in the map below.
Key
Areas of Major Matooke Production
Areas of Major Beer Production
Areas of Major Dessert Banana
Significant quantities of the dessert types bogoya (Gros Michel) and apple banana
(Sukali Ndizi) are produced in Mukono to the east of Kampala. Kibale on the
Congolese border is a notable producer of banana beer.
Until the 1970’s matooke production was traditionally performed in the central region
of Uganda. Since that time production has shifted south and west due to a combination
of:
i. Declining soil fertility
ii. Increase in pest and disease levels
iii. Changes in migrational labour patterns
iv. Increased competitiveness of growers in the west
v. Cultural attitudes of central region farmers being against own family
labour input
9

South-western production areas tend to be at higher altitudes meaning lower incidence
of the major pest and diseases namely weevil, black sigatoka and the most damaging
nematode species. Soils around Mbarara are currently seen as being fertile.
Market traders stated that south-western areas closer to Kampala, where matooke
production has taken place for a longer period of time, are now suffering yield
reduction. This perception is corroborated by traders in Owino market who sell
matooke in two grades called ‘Masaka’ and ‘Mbarara’. These names refer to different
sized banana fingers that are from the two different areas in the southwest. ‘Masaka’
is a smaller banana from an area closer to Kampala where matooke production has
been longer established. ‘Mbarara’ refers to a large finger and is from an area further
from Kampala where matooke production is comparatively new.
Ugandan National Household Survey statistics presented in figure one show matooke
production to be focused in the west region of the country, which accounts for 61% of
total matooke output. The Central region produces 1,687,000 tonnes or 30% of total
matooke output. The survey also shows the Central region as producing the highest
levels of ‘other’ banana types. This suggests the presence of beer types, verified by
field observation, which are grown where soil fertility has declined and dessert
varieties reported by traders as focused in Mukono district. Banana production is
significantly less common in Eastern and Northern regions where agro-climatic
factors constrain production.
Production ('000 tonnes)
4000
3500
3000
2500
2000
1500
1000
500
0
1687
360
Figure One Production of Matooke by Region
481
18 14 15
3363
192
Central Eastern Northern Western
Source UBOS Ugandan National Household Survey 1999/2000
Matooke
Others Banana Types
Major routes for the movement of bananas are show on the map below. Major trade
flows destined for Kampala originate from the southwest. Significant movement is
seen to consumption zones east of Kampala as far as the Kenyan border. Major
Ugandan matooke exports cross into Rwanda with minor flows of roasting bananas
reported entering from the Congo.
10

3.5 Production Levels
Ugandan production levels appear to be gradually increasing (see table one below).
The statistics presented appear to suggest that over the past decade more land is being
allocated to banana production, however this cannot be fully confirmed.
Table One Ugandan Banana Area Planted and Production Level
2001
1996 1997 1998 1999 2000 (estimate)
(Projection)
Area Planted ('000 Hectares) 1,524 1,538 1,553 1,570 1,598 1,622
Production ('000 Tonnes) 9,144 9,303 9,318 8,949 9,428 9,732
Source; UBOS Statistical Abstract June 2001
National household survey figures (Table two) show how production is divided
between banana types. Matooke is the main banana produced, followed by brewing
and dessert bananas. This data also shows a significant decline in total production
levels. The National Household Survey report attributes the fall over the past five
years to drought and the ‘dynamics’ in the producer market.
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Table Two Ugandan Banana Production (Tonnes)
Banana Type 1995/1996 1999/2000 % (1999/2000)
Matooke 7,908,984 5,545,134 90%
Brewing bananas 1,164,887 538,304 9%
Sweet (Dessert) bananas 383,949 46,286 1%
Total 9,457,820 6,129,724 100%
Source: Ugandan National Household Survey 1999/2000
3.6 Importance Of The Sub-Sector To Earnings, Rural Livelihoods, Poverty
Alleviation And Economic Growth
Most bananas are produced on small plots of

3.7 Consumption
The East African Highland Cooking Banana is an important food staple in Uganda.
The FAO estimated average per capita consumption at 207 kg/year in 1999. With a
total population of twenty-two million people this suggests total consumption of
4,554,000 tonnes. As no wastage of production has been found as part of this study,
the above total consumption figure supports Ugandan annual production figures of
five to six million tonnes as opposed to estimates of approximately ten million tonnes.
Household survey data in Table four shows matooke as the main staple food in
Kampala. It also displays the traditional high consumption zones in the western and
central regions of the country.
Table Four Percentage of Staple Food Consumption as a Percentage of Household
Monthly Consumption
Region Matooke Cassava Sweet
Potato
Maize Millet
Western 17.95 4.84 8.4 4.31 5.35
Central 8.69 5.56 4.83 4.7 0.54
Eastern 5.57 7.58 6.04 5.87 5.15
Northern 0.57 8.93 4.27 4.77 8.32
Kampala 6.55 1.91 2.15 2.46 0.35
Uganda 8.67 6.22 5.64 4.79 3.7
Source: Integrated household survey 1992-1993
A report by the CTA (2001) suggests that per capita consumption in urban areas of
354.4 – 493.5 kg/year has surpassed that of rural consumption levels. It should be
noted that matooke is a high cost staple compared with cassava and sweet potato.
13

3.8 Production Constraints
3.8.1 Soil fertility
Bananas remove large amounts of soil nutrients with the harvest of fruit bunches.
Lack of nutrient replenishment can lead to a non-sustainable situation reducing yields
and productive life. Studies exploring the shifts in Ugandan production found
Magnesium as a key constraint with Nitrogen and Potassium deficient on most farms
in central Uganda. Results and observations from fieldwork conducted as part of this
study support existing concerns expressed by Gold et al for a lack of nutrient
replenishment leading to a non-sustainable situation evolving in southwest Uganda.
Given the important position of matooke in the diet of Ugandans, efforts to ensure
sustainability and improve production methods have a high priority. To achieve
sustainable production, areas of soil fertility and pest and disease should continue to
be addressed.
Interventions
Existing evidence for continued declining in soil fertility caused by bananas is
contested and appears, within the time frame of this study, as an unresolved issue.
Priorities exist to establish what changes in soil fertility status are being caused by
banana production and what production location shifts are continuing to occur.
If soil fertility levels are continuing to decline a priority is to establish why and design
appropriate responses. It is suggested this may include establishing why farmers do
not manage soils in a sustainable manner through recognised practices of mulching,
manuring, rotating cropping and improved livestock integration.
Lack of re-investment in soils suggests farmers view future benefits from any
investment as smaller than the current investment cost. Further exploration is
suggested of farmer’s current knowledge of soil management, incentives to farmers
regarding reinvestment in bananas and farmer attitudes particularly towards risk and
the future.
Weevils
3.8.2 Pests and Diseases
Weevils are commonly seen as the most destructive pest of matooke and are
considered the most economically important pest in East African Highland banana
plantations. Other banana types (Cavendish, Beer, Bogoya) appear less susceptible to
weevil attack. Reduced levels of Magnesium and Potassium may have weakened
resistance to banana weevil (Bosch et al 1995).
Interventions
Support extension and delivery of information to encourage cultural control
including:
- Use of clean healthy planting material
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- Paring of corms at planting
- Destruction of post-harvest residues
- Trapping of adult weevils.
- Good crop husbandry such as weeding, desuckering, pruning, manuring and
mulching to produce vigorous plants.
- Sward strips
Nematodes
Nematodes are an important banana production constraint worldwide. The pest is less
easily recognised than the weevil, which is sometimes incorrectly blamed by farmers
for nematode damage. This factor may lead to an underestimation of yield loss caused
by nematodes.
Interventions
Support extension and delivery of information to encourage cultural control
including:
- Crop rotation
- Use of clean planting material (removal of roots and outer layer of the corm)
- Soil amendments through weeding and manuring
Continued research into and promotion of resistant cultivars. Development of
nematode resistant banana cultivars is a priority objective of the Ugandan bananabreeding
project.
Black Sigatoka
This air borne fungal disease was first reported in Uganda in 1989 when it made an
economically important impact by causing incomplete fruit filling. Black sigatoka is
considered a key constraint to banana production worldwide and is sensitive to
altitude and temperature. Diagnostic survey results show black sigatoka to be absent
at elevations above 1450 m .asl and where mean minimum temperatures exceeded 15
Ο C (Tushemereirwe et al 1993 and 1996 from CTA).
Interventions
Continued development of resistant cultivars. (Resistant highland bananas are being
developed. Resistant hybrids developed from exotic banana do exist with ongoing
work suggesting some of these are acceptable to consumers (CTA 2001)).
Support to extension services encouraging good crop husbandry that is seen to lead to
a more vigorous plant better able to outgrow attack.
Fusarium wilt (Panama disease)
In Uganda Fusarium wilt is prevalent on introduced banana cultivars that are used
primarily as dessert bananas (bogoya, sukila ndizi) and for brewing, e.g. kayanja
(Kangire and Rutherford). To avoid this disease, large plantation owners in South and
Central America replaced bogoya (Gros Michel) with resistant Cavendish varieties.
15

Symptoms similar to those of Fusarium wilt have also been observed on endemic
AAA highland banana cultivars, which have previously been considered to be
resistant to the disease (Kangire et al). Wilt of highland cultivars was only observed
in western Uganda at altitudes greater than 1300 meters above sea level and mainly
within 30 meters of homesteads, animal kraals and garbage dumps (Kangire et al).
Interventions
Development of host plant resistance
Cultural approaches, including sanitary practices and the use of pathogen-free
planting material, may reduce losses and should be used in support of host resistance
wherever possible.
Further development and widespread implementation of appropriate management
strategies.
Note on Chemical Control of Banana Pest and Disease
Interventions relating to inorganic inputs have not been included in the suggested
interventions. This is due to the following considerations:
- Banana production in Uganda is largely organic with export opportunities seen to
exist in this market niche.
- Availability of chemicals is limited in many rural areas
- Chemicals are largely unaffordable to small-scale producers
- Farmers in Tanzania (Kagera) are reported as not being willing to apply inorganic
inputs due to previous bad experiences when inappropriate chemical input
destroyed crops (Blomme G, personal comment).
- With the shift in production zones in Uganda to higher altitude fertile soils, less
susceptible to pests and diseases the use of inorganic inputs is questioned.
16

3.9 Marketing Constraints
Bulkiness
Bananas have a relatively low value compared to their volume/weight which
influences transportation cost making commodities with higher value but lower
volume and/or weight more attractive.
Perishability
Bananas are a perishable crop with limited time between harvest and the onset of
deterioration.
The constraints of perishability and bulkiness have led to efforts to reduce bulk and
improve storage through drying and alcohol production.
Poor Infrastructure
Those involved in transporting bananas highlighted feeder roads as areas for attention
as they become impassable in times of rain. The declining yields of plots close to
main roads and planting of new areas with poorer transport access will increase the
importance of feeder roads.
Embrecht et al (1996) ranked poor infrastructure as the number one constraint limiting
market development in the majority of rural areas in Uganda. Uganda currently has
some main roads in relatively good condition leading to the southwest and central
regions. Any further movement of production areas further to the south and west will
increase importance of main roads.
Previous commodity studies in this series and the recent Transaction Cost Analysis
Report (2002 NRI, IITA) have called for the appraisal of, and investment in, feeder
and trunk road, which this study supports.
Security
Traders and Brokers entering rural areas are recognised targets for thieves as they
carry large amounts of money. A regularly mentioned deterrent to traders is risk of
thuggery.
Legal requirements
Traders, wholesalers and retailers of bananas and banana products require:
- Trading license from the city authority (K.C.C.).
- Permit from the area local council from where the bananas, waragi or tonto (beer)
is purchased.
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Access to Credit
The initial capital required to enter many of the trading roles in the supply chain
represents a barrier to entry to those with insufficient funds to make initial
investments.
In additions to the above constraints of bulk, perishability, poor infrastructure and
security the following constraints apply to exports.
Air Freight Cost to European Markets
Airfreight charges from Entebbe to London are currently US$ 1.50 to 1.70 / kg
making Ugandan bananas uncompetitive with Caribbean countries who have better
access to the sea ports as a cheaper means of transport. Mombassa to Felixstowe sea
freight costs approximately $0.40 / kg. Research by Merck and Icemark – Africa Ltd
suggest transport by sea from Kamala to Felixstowe takes approximately thirty-five
days. Icemark – Africa Ltd consider this time period as too long to allow sale in
Europe before fruit deterioration begins.
Continuity of Supply (Market Organisation)
For export produce targeting retail or supermarket outlets via air freight there is a need
for a regular and reliable flow of produce to meet defined buyer and air carriers’
timetable requirements. A need exists for producers to plan ahead to ensure they
supply what the market wants in terms of quality and quantity when it is required.
For small-scale producers to meet these market requirements marketing group / cooperative
formation is one way of combining and coordinating selling of required
volumes. Farmers involved in this planned coordinated marketing will require
appropriate capacities that some key informants felt were currently absent. Cooperative
marketing arrangements have had a poor past record as incentives exist for
individuals to sell independently especially at times of high prices.
Another alternative would be exporters developing contractual arrangements with
large farmers. These people are seen to possess the resources necessary to produce
sufficient volumes, the management skills for contractual negotiation and production
planning and have incentives to maintain long-term contractual relationships.
Certification for Organic Produce
To sell organic produce in Europe a certificate of authentication is required. This has
a high cost ($US 5,000 per farm) and is controlled by European institutions. The
process of attaining a certificate can take from one to five years. The National
Organic Agricultural Movement of Uganda (NOGAMU) is currently active in
drawing up a Ugandan national standard with local group accreditation to reduce
certification costs.
A number of exporters currently cover or subsidize farmer’s organic certification
costs. Depending of which European institution is involved; inspectors may have to
visit every farm so costs rise with the number of farmers.
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Specific Constraints of Sukali Ndizi Exports to Europe
Exports to Europe of sukali ndizi are currently seen to face three main barriers related
to inconsistent and poor quality fruit supplied to wholesale markets. These are:
1. Difficulty in controlling and predicting the ripening of sukali ndizi
2. Rough and untrained handling from growers and transporters damaging fruits that
are very susceptible to blemish
3. Current Ugandan varieties having the characteristic of forming unattractive skin
blotches as opposed to giving a speckled appearance on ripening
Investment in research into ripening control and plant breeding for skin colouration
characteristic could overcome two of these barriers. Increased farmer / transporter
training in handling requirements should assist these people to receive higher prices
for their products.
One possible answer to the above hurdles is slicing and drying. This opportunity is
discussed in section 4.6.
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4 DEMAND ANALYSIS
4.1 Size of National Markets
The three main markets for bananas were visited in Kampala. Volumes of the three
main banana types traded in these markets are shown below in table five. Prices and
daily volumes are averages that vary according to season.
Table Five Volume and Market Values For Three Main Kampala Markets
Kalerwe Market (Approx number of bunches / day)
Locations at Market
In Fresh Items
Section (Within
Market)
Total Daily
Volume
(bunches)
Total
Annual
Volume
(Tonnes)*
Total Annual
Retail Value
US
Dollars
^^
At
Roadside At Entrance
(Ug Sh)**
Matooke 1,200 800 1,800 3,800 34,675 6,241,500,000 3,467,500
Bogoya 20 20 50 90 821 344,925,000 191,625
S Ndizi 150 150 200 500 2,281 730,000,000 405,556
Total 1,370 970 2,050 4,390 37,778 7,316,425,000 4,064,681
Nakawa Market
Total Annual
Volume
(Tonnes)*
Total Annual
Retail Value
(Ug Sh)**
Total Daily
US
Volume
Dollars^^
Bunches 1500 13,688 2,463,750,000 1,368,750
Matooke Sacks^ 35 1,278 127,750,000 70,972
Bogoya Bunches 385 3,513 1,475,512,500 819,729
S Ndizi Bunches 430 1,962 627,800,000 348,778
Total 20,440 4,694,812,500 2,608,229
Owino / Balikuddembe Market
Locations at Market
Total
Annual Total Annual
Volume Retail Value
(Tonnes)* (Ug Sh)**
Fresh Commodity
yard
Kafumbe Road
spot
Total Daily
Volume
US
Dollars^^
Bunches 1,000 650 1,650 15,056 2,710,125,000 1,505,625
Matooke Sacks^ 250 40 290 10,585 1,058,500,000 588,056
Bogoya Bunches 145 145 1,323 555,712,500 308,729
S Ndizi Bunches 250 250 1,141 365,000,000 202,778
Total 1,645 690 2,335 28,105 4,689,337,500 2,605,188
* Annual volume in tonnes is calculated at:
Matooke and Bogoya: 40 x 25kg bunches equals one tonne
Ndizi: 80 x 12.5 kg bunches equals one tonne
** Values are retail, calculated at Matooke 4500/bunch, Ndizi 4000/bunch, Bogoya 10500/bunch
^ One sack of Matooke equals approximately 100kg with a value of Ug Sh 10,000
^^ US $1 = Ug Sh 1800
20

In Nakawa market major delivery days for bogoya and sukali ndizi are Saturdays,
Mondays and Wednesdays. Main sources of supply to this market for dessert banana
are Mbarara and Kyagwe (Mukono).
Table Six Combined Present and Future Volumes for Three Main Kampala Markets
Total Number of Total Weight Total Number of Total Weight
Bunches 2002 2002 (Tonnes) Bunches 2010 2010 (Tonnes)
Matooke 75,282 1,882 99,247 2,481
Bogoya 5,657 141 7,458 186
S Ndizi 5,384 67 7,098 89
Total 86,323 2,091 113,803 2,756
Combined volume figures for the three markets are given in table six. It is suggested
that the three markets represent approximately twenty percent of total Kampala
consumption.
Predicted annual volume figure calculations for market turnovers in 2010 are based on
2002 volumes, annual population growth of three percent and an increase in
urbanisation from sixteen percent to twenty two percent of the population. These
population dynamics are seen to raise market turnover that is closely related to
consumption by 27,480 tonnes per annum. This represents a healthy rate of demand
growth of thirty two percent over eight years.
21

4.2 Size and Growth Rates of Regional Markets
Kenya
Data is gathered by the USAID funded Agribusiness Development Centre (ADC)
IDEA project at selected Ugandan border points for volumes and values of bananas.
Kenyan figures are presented in two figures below. ADC data shows fluctuating trade
with Rwanda with data not collected since mid 2001, a period of political tension
between the two states. Results from the Rwandan component of this regional study
suggest significant volumes of Ugandan matooke entering Rwanda. Minimal banana
trade is seen with Tanzania. Key informants report small levels of Ugandan imports of
roasting banana from Congo. Some observers view the Congo as a potential export
market for Ugandan matooke if Congolese purchasing power increases. The tastes of
Congolese Bantu related tribes favour matooke as a dietary staple.
Tonnes
Value Millions Ugandan Shillings
1200
1000
800
600
400
200
600
500
400
300
200
100
0
0
Figure Two Volume of Ugandan Exports of Apple Banana and Bogoya
to Kenya
2000 2001 2002
Figure Three Value of Ugandan Apple Banana and Bogoya Exports
to Kenya
Data Source: ADC IDEA Project
Year
Year
2002
22

Figures for Ugandan exports to Kenya, which include matooke, sukali ndizi and
bogoya banana passing through Busia, Lwakhakha and Malaba border points show a
fall in total export volumes of 27% from 9,000 tonnes in 1997 to 6,600 tonnes in
2001. Disaggregated data shows sukali ndizi and bogoya types to form over ninety
five percent of these exports.
Interestingly, trends in available data (2000 to mid 2002 shown in figure two) suggest
volumes of sukali ndizi and bogoya are flat with volumes increasing towards the end
of the year. Trends in the total value of monthly trade appear to be rising (figure
three). Exchange rate movements between the Kenyan and Ugandan Shilling between
2000 and mid 2002 suggest a slight depreciation of the Ugandan Shilling making
Ugandan exports more attractive. Figure two and three support ADC field staff
observation of rising prices for bananas in Kenya. It should be noted that data sets
include informal estimates of both quantities moving by minor trade routes and values
of bananas. ADC data collectors suggested trade with Kenya in sukali ndizi and
bogoya had improved. Uganda is seen as having few competitors in supplying
bananas to western Kenya where the environment is unsuitable for production.
The following taxes existed on Ugandan banana exports to Kenya at January 2000:
3.5% Import duty
2.75% Declaration form payment
1 Kenyan shilling per kilogram horticultural tax.
Trade Point:- Ugandan dessert banana exports to Kenya appear to present a good
long-term opportunity for Uganda. Ugandan dessert banana exports can be
consolidated by improvements in product quality and information flows. Further
exploration of volumes and prices is suggested to increase the time span and quality of
available data.
Rwanda
Data gathered at Katuna border point for nine months from January to September
1999 shows 2,433 tonnes of matooke exports crossing to Rwanda (ADC Idea Project).
Trade Point:- According to findings from the Rwandan marketing survey in this
series an approximate total of 12,500 tonnes of bananas crosses from Uganda into
Rwanda annually. This mainly comprises matooke. The Rwandan banana market
study suggests this export market as having potential for expansion.
23

4.3 Size and Growth Rates of World Markets
The world export market for bananas is increasingly competitive. FAO data presented
in table seven shows an increase in volumes from 1995 to 2000 of seven percent
while total market value has declined over the same period by eight percent.
Table Seven World Markets for Banana and Plantain
Year
Bananas and Plantains 1995 1996 1997 1998 1999 2000
Exports - Qty (Mt) 13,674,981 14,237,533 14,878,530 14,338,569 14,479,990 14,654,317
Exports - Val (1000$)
Source FAO
4,789,993 4,950,122 5,185,447 5,038,131 4,786,861 4,413,357
In this increasingly competitive market ADC IDEA project figures suggest that
Ugandan matooke volumes have risen. The main export market for Ugandan bananas
in Spitalfield, London. In 2001 Uganda exported 832 tonnes of matooke from a level
of 451 tonnes in 1997 (see appendix three). The value of 2001 matooke exports is
approximately US $2,080,000 (at one tonne equals US $2,500) Sukali ndizi exports
have not performed so well with volumes shrinking from 144 tonnes in 1997 to 92
tonnes in 2001 (Prices are discussed in section 4.4). The approximate annual value of
this volume fall for sukali ndizi is US$ 156,000 (52 tonnes multiplied by US$ 3/kg).
Kg
90000
80000
70000
60000
50000
40000
30000
20000
10000
0
Figure Four Fresh Matooke and Apple Banana Export Volumes
JFMAMJJASONDJFMAMJJASONDJFMAMJJASONDJFMAMJJASONDJFMAMJJASOND
1997 1998 1999 2000 2001
Source: Civil Aviation Figures supplied by IDEA project
Matooke Apple Banana
The UK market for matooke is considered fixed, dependant upon the number of
Ugandans living in the UK. However the export volume rises seen above question this
hypothesis. Suggested answers are increased consumption by expatriate Ugandans,
other ethnic groups such as West Indians increasing matooke consumption and
matooke increasingly being transported to other European countries. A small expatriate
Congolese based market is suggested in Belgium. Although matooke exports are a
small proportion of total Ugandan production, reduction of EU tariffs under the
‘Everything but Arms’ arrangement could assist further sales growth.
24

4.4 Market Price Trends
Local Markets
The following analysis of Kampala matooke prices follows methodologies used in the
FoodNet Cassava market study performed in 2000. Details of these methodologies
can be found in Trotter (1992).
Figure five below shows real retail food prices (adjusted for inflation) for matooke,
and the two other frequently harvested crops of fresh cassava and sweet potatoes.
Data is for Kampala between September 1989 and January 2000.
Real matooke prices appear to slightly decline over the time period suggesting supply
increasing faster than demand. Matooke prices exhibit less price variation compared
to the other two commodities. This suggests supply volumes have been more stable
over the time period considered and not as subject to pest and disease attack or
abnormal weather conditions as the other two crops.
Price Ugandan Shillings
500.00
450.00
400.00
350.00
300.00
250.00
200.00
150.00
100.00
50.00
0.00
1989
1990
Figure Five. Real Retail Prices for Selected Commodities (Kampala)
1991
1992
1993
1994
1995
1996
1997
y = 0.6055x + 169.55
y = -0.3824x + 245.15
1998
y = -0.285x + 214.6
Matoke Sweet potatoes Cassava, fresh Linear (Cassava, fresh) Linear (Matoke) Linear (Sweet potatoes)
Data Source: Ugandan Bureau of Statistics
Seasonal retail price movements for matooke in Kampala are shown in figure xx
below. The grand seasonal index (GSI) shows seasonal patterns that remain once
random, cyclical and trend elements have been removed from price series. The GSI
result shown below is again based on data from September 1989 to January 2000.
1999
25
2000

Results show a twin peaked pattern with high prices in April and December and
notably low prices experienced in June to September. Price movements are significant
with index results showing a forty percent rise (based on the mean price) between
August and December. These results confirm responses from key informant
interviews.
This price pattern is due to two main reasons. Firstly, prices are highest at Christmas
and Easter when consumers increase consumption. Matooke appears to be a preferred
food as people who would normally consume cheaper alternatives are said to save
money to eat matooke during these festival periods. Secondly supply is highest from
June to September, a period of normally dry weather that puts plants under water
stress and stimulates bunch production. Some traders felt farmers exhibited some
production response to price by withholding supply for relatively short periods
leading up to Christmas. Otherwise farmers are not seen to take any action to attain
the higher prices for their production.
Trade Point:- Potential exists to increase production to meet highest price periods.
Additionally any processing of matooke could best be designed to take advantage of
low cost price periods.
GSI
125
120
115
110
105
100
95
90
85
80
Figure Six. Grand Seasonal Index from Kampala Matooke Retail
Prices
Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec
Data Source: Ugandan Bureau of Statistics
International Markets
Prices for matooke over a two-year period to March 2002 in Spitalfield market,
London appear as relatively stable throughout the year varying approximate between
US$ 2.00 to US$ 2.70 per kilogram (see appendix four).
Sukali ndizi prices fluctuate widely between US$ 0.50 and US$ 4.46 per kilogram
over the same period and markets. Market reports suggest this is due to variable
quality, which appears as a major constraint. Sukali ndizi marketing constraints are
discussed in section 4.6.
26

4.5 Major Products
The only pronounced form of banana processing is beverage production (Aked and
Kyamuhangire, 1996 from CTA). These beverages are waragi a distilled spirit and
tonto a banana beer. There are two types of waragi, a local banana based waragi
called ‘Kasese’ and a factory processed waragi.
Local Waragi “Kasese”
Production areas for local waragi include Kibaalee Fort Portal, Kiboga, Mubende,
Masaka, Mbarara, Mpigi and Kasese. Kampala is the centre of trade. Transport is by
truck with Saturday, Monday and Sunday being the main delivery days. Jinja is a
centre for distribution to Eastern Uganda. Trade extends to Gulu, Lira and Kitgum in
the northern region. Regional exports to Rwanda, D.R.Congo and Kenya are illegal
but are seen to occur. Volumes of illegal exports are not known.
Consumption is reportedly increasing especially in the heavily populated urban areas
of Kampala including: Kamwokya, Rubaga Road, Ndeeba, Kisenyi, Kibuli,
Namuwongo and Nsambya. It is estimated that approximately two million litres of
local waragi are traded in Kampala with a retail value in the region of three billion
shillings (US $1,744,000). Kampala trade depots, with approximate volumes and
values of local waragi traded are shown in appendix five.
Pricing differs according to the level of distillation. There are two main levels of
distilling called ‘regular’ and a higher alcohol content version named ‘super’. Trade
is done in twenty litre jerry cans. Approximate prices are shown below.
Table Eight Approximate Kampala Prices of Local Waragi
Off Lorry Wholesale Retail
‘Regular’ 20 -22,000 25,000 27,000
‘Super’ 27, 000-28,000 29, 000-30,000 32, 000
Prices are for twenty litre jerry cans
Factory processed Waragi
Factory produced waragi can use banana based raw alcohol. Alternatives include
sugar or molasses based material. Uganda Breweries is a significant producer of
factory-produced waragi and currently use sugar based raw alcohol with added
flavourings. This company used to use local banana based waragi in the production
process, discontinuing this practice for cheaper sugar based alternatives.
Tonto Locally brewed banana beer
Tonto is made from the juice of beer bananas. Rural households in banana growing
regions traditionally brew this beer, which may be consumed at home, during
different traditional ceremonies or sold.
Main production areas include Mityana, Kibaale, Wakiso, Luwero, Masaka, Fort
Portal, Mpigi, Mbarara and Rakai. Millet is added during the brewing process. The
brew is transported in twenty litre jerry cans on trucks of sale.
27

There are various temporary depots in Kampala where retailers collect tonto. Main
trading days are Monday, Wednesday, Saturday and Sunday.
Estimated weekly trade volumes and values for Kampala markets are shown in
appendix five. It is estimated that approximately 1.4 million litres of tonto are
annually traded in Kampala with a retail value in the region of eight hundred million
shillings (US $437,000).
The major consumption areas in Kampala are the poorer more densely populated parts
of the city namely Kasubi, Nsambya, Kibuli, Namuwongo, Rubaga. Road, Natete,
Bunamwaya, Bwaayise, Makerere and Banda. Prices in Kampala are shown in table
xx below. Rural prices are around Uh Sh 200 per litre.
Table Nine Approximate Kampala Prices of Tonto
Off Lorry Wholesale Retail
‘1 st grade’ 6 - 7,000 9 - 10,000 12 - 13,000
‘Regular’ 5,000 6 - 7,000 8 - 10, 000
Prices are for twenty litre jerry cans
One large bunch of beer bananas valued at Ug Sh 1,000 is capable of making 20 to 22
liters of tonto. Other raw materials used include water and sorghum. Twenty two litres
of tonto requires approximately 1.2 kg of sorghum
Tonto can be stored for approximately seven days before it becomes bitter. However,
it can be distilled to waragi when past its shelve life.
Because of its mode of preparation, tonto is largely considered to be an inferior drink.
People are seen to switch to alternative forms of alcohol as incomes rise. Rising
average incomes in Uganda, assuming equitable income distribution, would suggest a
decline in tonto consumption.
Roasting Banana
According to the findings from the survey, it is estimated that 750 bunches of roasting
bananas are sold retail through major roadside markets every week. If a bunch weighs
25 kg, this means sales volumes of 18.75 tonnes per week or 975 tonnes per annum.
The total demand for roasting banana countrywide could reach 1,500 – 1,700 Tons
per annum, considering that some it doesn’t go through formal markets.
One bunch has forty to fifty fingers that are bought by retailers at an off lorry price of
Ug Sh.100 - 125 per finger. Following roasting on a charcoal fire the retail price is Ug
Sh. 125 - 167 per finger. Using these figures an approximate annual retail value for
this roadside market is Ug Sh 263,250,000 (US $ 150,000).
28

4.6 Overview of Market Potential for Banana and Banana Based Products
This section provides a summary of the market potential for banana and banana based
products in a range of uses locally, regionally and internationally.
Areas with Good Potential to Increase Banana Sales in the Near Future (

and fairtrade markets are suggested by Carlton et al as areas for technology,
managerial and operational development.
Rwandan Market for Matooke
The Rwandan banana market survey (Ferris et al 2002) suggests a growing market for
Ugandan matooke in Rwanda.
West Kenyan Market for Bogoya (Gros Michel)
Ugandan based survey results suggest rising prices and values particularly for bogoya
exports to Western Kenya.
Ugandan Market for Locally Brewed Waragi ‘Kasese’
Traders involved in supply of local waragi felt demand was increasing. No official /
reliable price or volume records were found as part of this study to confirm growth
trends. Research investment in this area is seen as having negative social implications.
Sectors Currently Viewed as having Moderate Potential for Growth in the
Foreseeable Future (>5 years)
Local Market for Matooke
The local Ugandan market is viewed as stable with low levels of volume growth and
constant to falling real prices providing no serious disturbance to production occurs.
Urbanisation will increase demand with any income growth especially by poorer and
middle-income families viewed as beneficial to matooke market prospects by making
unexpressed demand effective.
Pancakes (Kabalagala)
A traditional food made from ripe bananas and cassava flour. Seen as an inferior good
compared to wheat flour based cakes and biscuits. Similar market prospects to
matooke, constant to moderate growth foreseen.
Banana paper
Banana paper made from banana fibres. Large banana producing countries are seen to
have a competitive advantage on international markets. Locally a relatively small
market is seen selling to tourists, expatriates and wealthy Ugandans. Future growth in
Ugandan incomes and tourism are seen to influence market potential for these product
types.
Local Roasting Market
Plantain (‘Gonja’) is roasted and sold at roadsides or in markets by small traders.
Increase in traffic along major routes has potential to increase consumption of this
type of banana.
30

Sectors Currently Viewed as having Low Potential for Growth in the Foreseeable
Future (>5 years)
Juice
Selected highland and exotic types can be ripened and squeezed for juice, which can
be consumed fresh or fermented to local beer/wine. Short storage period limits market
to a local rural level.
Tonto (beer)
Viewed as an inferior good compared to bottled beers because of its mode of
preparation. People are seen to switch to alternative forms of alcohol as incomes rise.
Rising average incomes in Uganda, assuming equitable income distribution, would
suggest a decline in tonto consumption.
Banana flavourings / essences
Bi-products from Uganda will have to compete on world markets against products
from the large plantation countries. These countries are seen to have significant cost
advantages
Cosmetics i.e. use in Body shop products
Large plantation countries are seen to have the advantage. To compete Uganda would
have to make advantage of its largely organic production systems.
Replacement flour in bakery products.
Banana flour is used experimentally as a potential partial replacement for more
expensive flours in bread, cakes and biscuits. No evidence for commercial uptake has
been discovered by the study in Uganda for this alternative.
In local markets, cassava flour represents an alternative that is easier to grow on poor
soils and requires minimum crop husbandry / management.
On international markets large scale producers such as South and Central American
countries are seen to have a competitive advantage in bi-product markets as their
quantity of fresh banana rejects gives them a negligible raw material cost for making
flour.
Banana flour used as a constituent in baby/weaning foods
Constituent banana flour is seen to have to meet significant health and hygiene
requirements to be used in baby and weaning foods. Again cheaper raw material costs
in from South and Central American countries are seen to have cost advantages on
world markets.
Banana pulp
Research at Makerere University has taken place to produce a dried banana pulp
(flour) that can be stored and later re-hydrated and eaten as a matooke substitute. In
31

the past this was seen to have food security enhancing potential as a food reserve
against famine. Since this research, Ugandan food production has risen, largely
removing the threat of famine. Fresh matooke is preferred to the re-hydrated product
by consumers.
32

5 SUPPLY ANALYSIS
5.1 Analyse of the supply chain
Figure seven below shows a generalised picture of the major participants in the
banana supply chain. These participants are discussed individually below.
Figure Seven. The Banana Supply Chain
Exporter
Export
Market
Farmers
Farmer
Wholesaler
Bicycle
Transporter
Broker at Road
Side Collection
Centre
Urban
Retailer
Urban Consumer
Rural
Retailer
Key
Major Flow
Minor Flow
Rural
Consumer
Many small scale producers exist who sell bunches of bananas to bicycle traders, if
the farm is conveniently situated next to a road, sales can be made to passing vehicles
including those of brokers or wholesalers. Price negotiation is usually performed
before the bunch is cut from the plant after which cash is paid and the bunch removed.
Negotiation is based on finger and bunch size, banana type and variety. Farmers were
aware of consumer preferences for different varieties of matooke such as Nakitembe
and Kibuzi. The farmer is seen to have limited bargaining power as bunches cannot
be retained for any significant period of time. Traders mentioned some producers
holding back supply for two to four weeks at times of rising prices. A general picture
was of producers having to sell bunches when ready to meet necessary household
expenditure. Farmers were found to receive price information from visiting collection
centres, the radio or interaction with other traders.
33

Bicycle Transporters
Bicycle transporters buy from dispersed farmer plots and sell to brokers at collection
centres or traders in towns. Many bicycle transporters supply each collection centre.
Competition exists between these people and barriers to entry appear low.
Transporters have some control over price in negotiations with farmers especially if
other traders do not visit that farm. However at the collection centre they have less
power as they cannot store bananas or easily take them elsewhere. Large bunches are
preferred with one bicycle able to carry up to seven bunches depending on bunch size.
Brokers
A small number of brokers usually operate at collection centres in production zones
where they purchase sufficient bunches to fill rented trucks that are usually destined
for Kampala. Typically trucks contain at least ninety percent matooke with bogoya
and sukali ndizi filling the remaining space. Bunches purchased are graded according
to size and type. Matooke bunches with small fingers have the fingers removed and
put in sacks. These sacks allow more small bananas to be carried on trucks.
Some brokers have repeated delivery schedules whereby regular numbers of bunches
are delivered to different urban-based wholesalers at different locations usually in and
around Kampala. In this case, the broker will rent the lorry and organise loading.
Wholesalers can contact brokers to adjust amounts using phones or truck drivers to
deliver messages.
Brokers are in regular contact with farmers who visit collection centres, bicycle
transporters, truck drivers and wholesalers. They are seen to have good price
information from urban centres, interaction with other traders and the radio. Mobile
phones are seen to have improved broker to wholesaler contact.
The small number of brokers and the market information available to them give
brokers some ability to influence price. Barriers to entry for people wanting to enter
this role include the capital required to rent and fill a truck. This is estimated at
approximately Ug Sh 1.5 million (US $ 850) for a ten tonne truck capable of carrying
six hundred bunches. A disincentive for brokers is that having to carry relatively large
amounts of cash makes them a target for thieves.
Informal collusion between brokers is seen to increase their market power allowing
them to maintain their high gross and net margins (see table xx). Collusion and
informal cartels between brokers can also restrict new entrants wishing to transport
bananas.
Wholesaler
Kampala based wholesalers purchase bananas from broker lorries and sell bunches to
urban retailers or directly to consumers. Wholesalers may engage in vertical
integration by renting trucks to collect bananas from production areas to capture
brokers margins. This occurs at times of high urban prices when wholesalers and
other traders will transport bananas. These activities should be encouraged as a way to
reduce broker margins, increasing prices to farmers and reducing final consumer
price.
34

Trucks usually arrive in Kampala in the early morning when unloading and
distribution of bunches to retailers is performed. Wholesalers may extend credit to
retailers for a day allowing them time for sale.
A wide variation of between one to two hundred wholesalers can operate in a large
Kampala market who trade around eighty bunches per day. Interviews suggested
stronger competition between wholesalers than between brokers. No significant
collusion occurs between different wholesalers to fix prices.
Urban Retailer
Relatively large numbers of specialised banana retailers sell at roadsides or within
markets sites. They grade bananas by type, variety and size. For matooke large
bunches with big fingers are generally sold to wealthier people who have their own
transport. Small matooke fingers tend to be arranged in piles and sold in smaller
quantities to people who use public transport. Bogoya and sukali ndizi are sold in
hands, usually by separate specialised traders for these banana types.
Matooke retailers buy from wholesalers in the morning at a price largely determined
by market levels of supply and demand. The final consumer price is negotiable.
Consumer price will rise through the day if demand is strong or fall if few buyers are
present in the market. Most consumer trade is done in the evening and matooke
bunches are not usually stored overnight. Some market retailers were found to have
their own associations, which are reported to be new in some cases (i.e. Luwero). No
evidence of price collusion between retailers was found as part of the study. Some
retailers access credit from micro finance institutions others receive daily credit from
wholesalers. Barriers to entry include a local council letter of approval, market
authority registration and space in the market place.
Exporters
Regional exports to Kenya, Rwanda, Tanzania or the Congo can be performed by
brokers, wholesalers or producers / bicycle transporters living close to borders.
For European markets, it is estimated that ten to fifteen trading organisations arrange
matooke and sukali ndizi exports. These organisations purchase in urban or rural
markets or receive deliveries by farmers or traders to their premises. The exporters
vary in their levels of sorting, grading and packaging of produce. For matooke the
variety Kibuzi is preferred by UK based consumers.
Three main exporting organisations exist for organic bananas. One of these exporters
deals in fresh sukali ndizi and all three companies export solar dried sukali ndizi
and/or bogoya. These bananas may be grown by the exporter or purchased from out
growers who the exporter registers as organic producers. These exporters grade, pack
and label produce which is flown to Europe.
35

5.2 Market Linkages
To measure market linkage, correlation coefficients are used to examine if price
movements from different towns are consistent with one another. Correlation coefficient
values close to one indicate movements are similar, while those close to zero
show no similarity in the direction of movement. Following conventional practice
(from Collinson et al), coefficients of over 0.8 suggest high correlation, while
coefficients between 0.6 and 0.8 are said to show moderate levels of correlation.
Table ten gives correlation coefficients for towns in south-western and central Uganda
where we would expect to see moderate and strong correlations between market
prices. High correlation levels are shown in blue with moderate levels given in green.
The majority of market co-efficients show moderate integration suggesting price
movements and therefore supply and demand patterns are similar.
Table Ten. Correlation Coefficients for Matooke Prices in Selected Towns
KABALE KASESE LUWERO MASAKA MBARARA RAKAI
KABALE 1.00
KASESE 0.65 1.00
LUWERO 0.61 0.70 1.00
MASAKA 0.74 0.76 0.62 1.00
MBARARA 0.62 0.76 0.82 0.55 1.00
RAKAI 0.56 0.59 0.18 0.69 0.33 1.00
Source: Calculations based on FoodNet price data Sept 1999 to April 2002
The correlation co-efficient levels found suggest good information flow between
markets. Fieldwork performed during this study shows brokers as having the best
market information due to interaction with and connection to most parts of the market
chain. Mobile phones and text messaging have potential to improve information
exchange between participants in the different markets, which has potential to further
increase levels of market integration discussed above.
Isolated farmers who do not visit markets possess the least up-to-date market
information. Bicycle traders visiting these people are viewed as having an advantage
in price negotiations.
36

5.3 Production costs
Banana production in Uganda is associated with a number of farming systems
including, banana-coffee and banana-millet. Pure stands are not common among
smallholders (CTA). To provide an indication of production costs, the following gross
margin analysis uses figures collected by NARO / ADC in 1998 for Kisekka subcounty
in Masaka district.
Table Eleven. Gross Margins Under Hired and Family Labour for Matooke
Under hired
labour
Under family
labour
Ug Sh / Ha Ug Sh / Ha Ug Sh / Ha Ug Sh / Ha
Total Revenue 1,370,000 1,370,000
Costs
Labour 479,300
Animal manure 296,400 296,400
Mulch 237,400 237,400
TOTAL COSTS 1,013,100 533,800
Gross margin 356,900 836,200
Notes:
Total revenue calculation is based on production of 27.4 tonnes per hectare sold at Ug Sh 50,000 per tonne
Animal manure calculation is based on a cost of Ug Sh. 889,000 incurred once in three years.
Mulch calculation is based on a cost of Ug Sh 712,200 incurred once in three years.
Source: Banana Production Manual NARO / ADC IDEA project
Figures used are illustrative as prices and volumes fluctuate. Fieldwork interviews
suggest that the above gross margins may be understated as labour costs for the
limited number of farmers interviewed were approximately Ug Sh 200,000 per hectare
per year. These farmers were also unlikely to pay for manure or mulch instead using
on-farm waste. This suggests possible producer gross margins in excess of one million
shillings per hectare. These margins would appear to be attractive to farmers with
fieldwork and secondary data suggesting production as rising.
5.4 Trading Costs and Margins in the Supply Chain
The information provided below in Table twelve is an indication of the costs and
margins incurred by participants in the banana marketing chain, as found by a rapid
survey performed in May 2002. Costs and returns are for banana trading between
south western Uganda (Mbarara and Masaka) and Kampala.
37

Table Twelve. Trading Costs and Margins
Farmer
Selling price 750
Bicycle Transporter
Matooke Sukali Ndizi Bogoya
Ug Sh / % Of selling
Bunch price
Ug Sh /
Bunch
% Of
selling
price
Ug Sh /
Bunch
400 3250
% Of
selling
price
Purchase price 750
400 3250
Selling price 1500
700 4000
Gross margin 750 50% 300 43% 750 19%
Costs
Market Cost 100
TOTAL COSTS 100
100 100
100 100
Net margin 650 43% 200 29% 650 16%
Broker
Purchase price 1500
700 4000
Selling price 3000 2000 6000
Gross margin 1500 50% 1300 65% 2000 33%
Costs
Market Costs at Collection Center 200 200 200
Labour to Load Truck*
33 33 33
Truck rental** 667 667 667
Damaged during Transport^^^ 0 70 400
TOTAL COSTS
900 970 1300
Net margin 600 20% 330 17% 700 12%
Wholesaler
Purchase price 3000
2000 6000
Selling price
3750 3000 7000
Gross margin 750 20% 1000 33% 1000 14%
Costs
Market Tax at Kampala
Labour to Unload Truck***
TOTAL COSTS
100 100 100
50 50 50
150 150 150
Net margin^ 600 16% 850 28% 850 12%
38

Urban Retailer
Purchase price 3750
3000 7000
Selling price 4500 4000 10500
Gross margin 750 17% 1000 25% 3500 33%
Costs
Market fee^^ 50
Storage loss^^^
0
TOTAL COSTS 50
50 50
300 700
350 750
Net margin^ 700 16% 650 16% 2750 26%
* Based on Ug Sh 20,000 total cost to load 600 bunches
** Based on Ug Sh 400,000 total cost per truck carrying 600 bunches
*** Based on Ug Sh 30,000 total cost to unload 600 bunches
^ Before income tax and payment of trading licence
^^ Based on Ug Sh 7000 pre month selling five bunches per day for twenty seven days
^^^ 10% of purchase price for S. ndizi and bogoya
Prices and costs shown above are mid point values based on supply chain participant
responses.
Bicycle transporters are reported to be able to carry up to eighteen bunches of
matooke per day depending on season, distance and bunch size. This suggests daily
net margins of Ug Sh 11,700 as achievable.
Brokers can carry approximately 600 bunches per truck. If this is assumed as all
matooke a net profit of Ug Sh 360,000 per load is possible. A broker may be able to
organise more than one truck per day and if so can make attractive daily incomes.
Wholesalers in Kampala (Kalerwe market) are said to deal in forty-to-eighty bunches
of matooke per day. These figures suggest net daily profit of between Ug Sh 24,000
and Ug 48,000 as possible.
Retailers of matooke bunches make approximately Ug Sh 700 per bunch. These are
generally large bunches of large fingered bananas which command a price premium
per bunch. Retailers sell small fingers in piles that weight 4.5 to 5 kg for Ug Sh 500.
These are purchased from wholesalers in bags of 100 to 110 kg that cost around Ug
Sh 8,000 per bag. Breakdown of the bunch and bagging is performed at the collection
centre in the production zone to reduce transport bulk. Sales of two to four bags per
day suggest retailer daily net profits of Ug Sh 4,000 to 8,000. Transport and storage
losses for matooke are reported as minimal.
Gross and net margins per bunch before storage loss for retailers of sukali ndizi and
bogoya are expected to be greater than those of matooke as losses from ripening can
be significant (fifty percent was quoted during interviews although a more
conservative ten percent loss is allowed for in the above calculations). Lack of coordination
by wholesalers was mentioned as a reason for oversupply and subsequent
39

high rates of loss. Over ripe sukali ndizi can be sold to makers of pancakes. Recent
enforcement of government regulations banning street vendors (hawkers) was said to
have negatively influenced sales, as street vendors no longer buy from retailers for
this trade.
Results from the analysis suggest that brokers can make attractive daily net profit
margins, depending on volumes traded. Ensuring low barriers to entry into these
markets should ensure excessive margins are eroded through competition.
Discouraging cartel type collusion between existing brokers and ensuring credit
agencies can operate in these markets to provide necessary working capital are ways
of lowering barriers to new entrants. Encouraging farmers (or their family members)
to perform the bicycle transport role would help producers capture additional margins
and give them improved market information.
40

6 MAJOR FINDINGS
Local Markets
1. Results suggest falling matooke yields in areas where production is well
established (Masaka) with new areas being planted in the southwest further
from urban centres (beyond Mbarara).
– Production appears to be moving further southward and westward away from
Kampala due to declining soil fertility. Land next to main tarmac roads is
increasingly planted with beer varieties that tolerate lower soil fertility levels.
Matooke varieties are being planted further from main roads increasing reliance
on muram roads which are more susceptible to rain damage.
– If soil fertility is continually eroded it has serious negative food security
implications related to this staple crop.
2. Daily incomes for brokers appear as attractive when compared to average
Ugandan income levels.
– Brokers renting ten tonne trucks holding six hundred bunches can make net profits
in excess of Ug Sh 300,000 (US $ 168) per load.
– Informal collusion by brokers is suggested as a means of reducing competition
from new entrants and ensuring margins.
– Barriers to entry for supply chain participants include local council approval,
market authority registration and sufficient space in the market place.
– Brokers and traders carrying large sums of money are targets for theft, particularly
in rural areas.
3. Farmers show little or no production response to predictable and significant
annual price movements.
– Significant annual price variation is seen to follow a cycle reaching a peak in
December and lows in August.
– Farmers do not time their production to meet these predictable price spikes
4. Fusarium wilt is a major deterrent to investment in sukali ndizi and bogoya
(Gros Michel) production.
– Sukali ndizi and bogoya are susceptible to Fusarium wilt that currently has no
known cure and can devastate plantations.
41

Regional Markets
5. Ugandan regional export opportunities appear for matooke to Rwanda and
dessert varieties to Kenya
– Increasing potential is seen for Ugandan exports of matooke to Rwanda. Current
volumes are estimated at twelve thousand tonnes per year.
– Rising prices and falling volumes of bogoya and sukali ndizi exports to Kenya are
found due to exchange rate changes?? Check exchange rates
International Markets
6. World banana markets appear as increasingly competitive. Recent changes
in European Union banana policy reducing preferential access are seen to
further increase competition.
– International banana markets are found as having increasing volumes and
decreasing total values.
– Introduction of the Cotonou agreement will open new markets in the European
Union for Latin American producers and increase pressure on large Caribbean
producers to be more competitive. Increasing international competition is foreseen
in banana alternative product markets including fibre craft products and processed
goods.
– Minimal potential is seen for Ugandan bananas in alternative food / industrial uses
that compete on, or are influenced by, world markets.
7. Market potential for Ugandan bananas is suggested in markets segments that
include organic or health focused fruit and ‘naturally’ solar dried bananas.
– The recent ‘Everything but Arms’ measure will reduce EU tariffs on fresh bananas
to zero for Uganda by 2006.
– European consumers are seen to favour food perceived as being healthy, organic
food and food produced in an environmentally conscious manner. Ugandan
banana production is currently largely organic.
8. International market potential is suggested for ‘naturally’ dried sukali ndizi.
– Exporters of dried sukali ndizi suggest most potential exists for organic solar dried
produce.
– Solar drying technology challenges exist for Uganda to dry increasingly large
volumes consistently when weather conditions may not be favourable.
42

9. Export volumes to Europe for fresh sukali ndizi have fallen due to supply of a
poor quality product. UK importers require large unblemished fingers of
uniform ripening and size. If quality can be improved UK market prices
appear as attractive.
– UK prices for Ugandan sukali ndizi fluctuate widely between US$ 0.50 and US$
4.46 per kilogram over a two-year period to March 2002. Market reports suggest
this is due to variable quality.
– Export volumes of sukali ndizi from Entebbe airport have fallen by thirty six
percent from 1997 to 2001.
– Quality issues include difficulty in controlling post harvest ripening, rough
handling and current Ugandan varieties forming unattractive skin blotches as
opposed to developing a speckled appearance on ripening.
10. Sales volumes of fresh matooke exported to the UK have almost doubled in
the past five years
– Matooke volumes into the UK have increased by eighty five percent to 832 tonnes
from 1997 to 2001.
– UK matooke prices have been stable over the last two years.
– Future sales growth for matooke is suggested into UK West Indian and Belgium
Congolese ethnic markets.
43

7 RECOMMENDATIONS
The first priority for Uganda is to ensure sustainable banana production systems and
increase the efficiency of the banana marketing chain from rural production areas to
urban consumption zones. A second priority is to capture regional market
opportunities that currently appear in Rwanda and Kenya. Finally international market
opportunities should be addressed. International efforts should be seen a part of
general initiative to increase exports of fresh and dried fruit and vegetables
particularly to Europe.
Domestic Markets – Ensuring Sustainable Production and Increasing Market
Efficiency
1. Matooke Sustainable Production Systems
Matooke is an important food security crop in Uganda. Population growth rates of
three percent per annum suggest significant increases in future demand. Addressing
soil fertility and pest and disease issues are essential to ensure sustainable long-term
production.
Interventions include:
Soil fertility
Further research to:
– Establish what changes in soil fertility status are being caused by banana
production and what production location shifts are continuing to occur.
– Establish why farmers do not manage soils in a sustainable manner through
recognised practices of mulching, manuring, rotating cropping and improved
livestock integration with design of appropriate responses.
Who National, Regional and International Research, Extension Providers
How (i) Further consultation with research and relevant stakeholders to access
available soil fertility data.
Depending on the quality of existing data:
(ii) Establishment of sites to measure changes in soil fertility levels caused by
matooke production.
(iii) Participatory research with farmers to better understand their choice of
soil management techniques with subsequent recommendations for
maintaining soil fertility levels.
Pests and Diseases
Weevils
44

Continued support to extension and delivery of information to encourage cultural
control including:
- Use of clean healthy planting material
- Paring of corms at planting
- Destruction of post-harvest residues
- Trapping of adult weevils.
- Good crop husbandry such as weeding, desuckering, pruning, manuring and
mulching to produce vigorous plants.
Nematodes
Continued support extension and delivery of information to encourage cultural control
including:
- Crop rotation
- Use of clean planting material (removal of roots and outer layer of the corm)
- Soil amendments through weeding and manuring
- Continued research into and promotion of resistant cultivars.
Black Sigatoka
- Continued development of resistant cultivars.
- Support to extension services encouraging good crop husbandry that is seen to
lead to a more vigorous plant better able to outgrow attack.
Who National, Regional and International Research, Extension Providers
How Continuation and enhancement of existing initiatives
2. Ensure and encourage competition through out the banana marketing
chain
Any restriction of competition is seen to allow existing traders to achieve excessive
margins with resultant lower returns to farmers and higher consumer prices. To
prevent excessive broker or trader margins existing in the medium and long term, new
entrants should face minimal barriers to entry. These should include:
(i) Ensure existing brokers and traders do not restrict competition through
informal cartels that prevent entry of potential competitors
Who FoodNet, Government of Uganda
How Use of this report as a lobbying tool to engage government in finding methods
of facilitating competition especially at a broker / wholesale level.
(ii) Provision of gross and net margin information to potential new entrants and
entrepreneurs
Who FoodNet, Market Authorities, Government and Non Government Extension
Providers
45

How Provision of gross and net margin information to potential new entrants to
increase competition where excessive margins occur. Potential entrants to the
banana marketing chain are suggested as farmers, farmer groups, cooperatives
and associations, existing wholesalers and truck operators.
Information on banana margins could be part of an initiative covering a range
of commodities. Delivery of the information should be through extension
providers, regular posters / flyers placed in markets or use of radio broadcasts.
(iii) Providing an enabling environment for micro finance organisations
Who FoodNet, Credit Providers
How Contact with micro finance providers and credit institutions to further explore
their role and ensure potential new entrants can access credit.
(iv) Ensuring markets offer sufficient space for traders
Who FoodNet, Market Authorities, relevant representatives from the Government of
Uganda
How Further contact with market authorities and government to discuss and plan
accordingly for growing markets
In addition, market site management should encourage trading within the
market rather than on roadsides. This would reduce traffic congestion caused
by roadside unloading.
(v) Ensuring legal / administrative requirements for trader do not unduly restrict
new entrants. Examples are local council letters of approval and market
authority registration
Who FoodNet, relevant representatives from the Government of Uganda and
Market Authorities.
How Further contact with relevant government and market authorities aimed at
minimising barriers of entry to new entrants.
3. Infrastructure development: maintenance and improvement of road
transport
Appraisal and investment in feeder and main roads is necessary to reduce transport
costs and ensure bananas can get to market especially in times of rain when these
roads become impassable. Declining yields of plots close to main roads and planting
of new areas with poorer access is seen to increase the importance of feeder roads.
Any further movement of production areas further to the south and west will further
increase the importance of main roads. These initiatives would also enhance
marketing of other commodities as suggested in a recent market study using a
transaction cost approach.
Who FoodNet, relevant representatives from the Government of Uganda
How Lobbying of government to maintain and improve road infrastructure
46

4. Security
Risk of thuggery acts as a deterrent for brokers, traders and transporters particularly in
rural areas. Removal of this disincentive for trade should increase coverage and levels
of trading activity.
Who FoodNet, relevant donor / technical assistance, relevant representatives from
the Government of Uganda, Communities, Police.
How Relevant lobby groups should encourage local government, communities and
police services to meet and find ways of reducing rural crime rates.
5. Farmer Production Response to Annual Price Spikes
Development of a farmer production response to predictable annual price variation is
a way to increase farm incomes, improve consistency in annual market volumes and
reduce consumer price peaks.
Who National, Regional and International Research, Extension Services, Farmers,
relevant NGO’s.
How Participatory research with producers, research and extension into controlling
the timing of sucker development and the timing of fruiting is suggested to
enable farmers to produce for periods of high demand.
Potential study areas include timing of planting new gardens, timing desuckering
to control new growth and use of appropriate irrigation systems to
control water stress that stimulates fruiting. Research should include a farmerbased
cost benefit analysis to ensure interventions increase farmer
profitability.
Regional Market Opportunities
6. Support to Regional Export Markets of matooke to Rwanda and Dessert
Varieties to Kenya.
Interventions to enhance these markets include:
(i) Provision of regional market price information using mediums currently
giving Ugandan price information.
Who FoodNet
How Inclusion of regional price information using existing channels.
(ii) Improvement or reduction of border barriers including tariffs and quotas.
Who FoodNet, Relevant Government representatives from regional countries.
How Lobbying of governments to jointly reduce regional barriers to trade.
47

(iii) Government efforts to ensure quick and efficient boarder crossing.
Who FoodNet, Relevant Government representatives from regional countries.
How Work with governments to facilitate trade by looking for realistic ways to
enhance border crossing.
International Markets
7. Addressing Dessert Bananas susceptibility to Fusarium Wilt.
Threat of Fusarium wilt attack is a significant disincentive to investment in bogoya
and sukali ndizi.
Required interventions to remove this disincentive include:
– Development of host plant resistance.
– Improved cultural practices include the use of pathogen-free planting material
with the further development and widespread implementation of appropriate
management strategies.
Who Relevant International, Regional and National research programmes.
How Continuation and enhancement of existing activities
8. Organic / health focused naturally dried dessert banana markets.
Study results suggest attractive prices and growing export markets exist for organic
health focused naturally dried banana products. A study exploring European markets
suggests opportunities if packaging and appearance can be made appealing. Options
include:
i. Improving the appearance of product packaging to compete in snack and
sweet market outlets.
ii. Improving the appearance of naturally dried banana through improved drying
techniques and plant breeding for appearance characteristics.
Who IDEA Project, FoodNet, Amfri Farms, TEFU and Fruits of the Nile
How Return visits to Amfri Farms, TEFU and Fruits of the Nile to explore interest
in addressing the above areas. Based on responses further joint research and
market trials are suggested.
9. Fresh exports of sukali ndizi.
Potential economic gain from successfully overcoming quality barriers for sukali
ndizi is estimated to be approximately US$ 156,000 per annum calculated on the basis
of lost sales in the past five years.
Requirements are the development of a consistent supply of a quality product.
Interventions should address:
48

(i) Control of fruit ripening after harvest by exploring post harvest packaging and
temperature control
Who IDEA Project, FoodNet, Amfri Farms
How Return visits to Amfri Farms to explore interest in addressing the above area.
Based on response, further joint research is suggested.
(ii) Improving fruit handling through out the supply chain by capacity building
approaches with fruit handlers
Who FoodNet, ADC IDEA Project, Agricultural Extension, Relevant Private sector
businesses
How It is suggested that fruit handling issues exist for other fruit and vegetables.
The above-mentioned actors should be contacted to coordinate and focus
further initiatives.
10. Reducing airfreight cost at Entebbe will increase Ugandan competitive
advantage in international fresh produce markets
Suggested initiatives are to lobby government and airport authorities to:
– Facilitate competition in the airfreight market by preventing any evolution of
monopoly by encouraging new airfreight carriers to enter the freight market.
– Ensure efficient airport freight administration and handling
Who IDEA Project, U-Trade, UpTop, FoodNet, Civil Aviation Authority, Relevant
Government Representatives
How This document should be used as a lobby tool to emphasis the importance of
Entebbe airports position in the export of fresh fruit and vegetables. If this
lobbying is successful action to ensure competition and improve handling
should occur.
11. Further research to determine possibilities for further expansion of
matooke sales in European markets
Potential is suggested for increased sales of fresh matooke to UK based West Indian
and Belgium based Congolese markets in Europe. Further research to determine
actual sales potential and how market requirements can best be met is suggested. This
could most efficiently form part of a wider study exploring Uganda fresh produce
potential in Europe.
Who FoodNet
How Further market research into the market potential for Ugandan fresh fruit and
vegetables, including bananas, in Europe.
49

Information Gathered with Businesses involved in Banana Markets
Organization &
Key Persons
Amfri Farms / African
Organics
PO Box 29078
Kampala
Uganda.
Amin Shivji
Managing Director
077 506644
aminjshivji@yahoo.com
Fritz Plattner
Consultant
077 502330
fripla@yahoo.com
Fritzao@africaonline.co.ug
Basic Information Relation to Banana Current Situation Potential links to
research
Organic fruit and Export fresh and Exports:
Collaboration on
vegetable exporters solar dried sukali Fresh -
ndizi to
approximately 2 Fusarium wilt
Own farm in Germany (Frankfurt) tonnes per week (Panama disease)
Luwero and 62 Out and Switzerland
Research a cure /
growers in Rakai
Solar Dried – prevention of
and Bugurari. Solar dried fruits about 400 kg / spread
used in Breakfast month s. ndizi.
cereal, ice cream and Volume is growing Need to know
snacks.
how to control
ripening. How to
start, stop and
restart ripening
(Problem is
irregular
insufficient
sunshine)
Suggest could
double volume if
overcome drying
problem
Suggest research
into temperature
control and
packaging
Interest in
exploring EU
tastes
Next steps/ Follow
up
Return visit to
explore interest in
research into control
of fresh sukali ndizi
fruit ripening and
packaging of dried
products
General Remarks
51

Organization &
Key Persons
Icemark – Africa Ltd
Bukoto Street
PO Box 40122
Kampala
Uganda.
Kristjan Erlingsson
Managing Director
077748798
kristjan@icemarkafrica.com
Organization &
Key Persons
Tropical Ecological
Fruits Uganda (TEFU)
PO Box 123
Mityana
Sam Nyanze
077 469003, 046 2102, 046
2442
kulikaug@imul.com
Basic Information Relation to Banana Current Situation Potential links to
research
Fish, Fruit and Export matooke and Exports:
May be interested
vegetable exporters s. ndizi to UK
in controlling
Spitalfield market Matooke – approx ripening of s.
Trade only no
6 to 7 tonnes / ndizi.
production
month
Cautious when
Ndizi – approx 1 working with
tonne / month research
Basic Information Relation to Banana Current Situation Potential links to
research
Solar Dried Fruit S. Ndizi – collect Export
Interest in
Exporters to from organically approximately one Increased
Denmark
registered farmers, tonne per month efficiency in
Main products are ripen, slice, dry, pack dry weight drying process
S. ndizi (Apple and transport to Sell to a Danish
Banana) and Entebbe
supermarket for
Pineapple
use in snacks,
breakfast cereal,
plan for use in
baby food
Next steps/ Follow
up
Next steps/ Follow
up
Return visit to
explore interest in
development of
packaging for dried
products
Requested copy of
report
General Remarks
Sees Ugandan
competitive advantage
in Hot peppers, Okra,
French beans, Passion
fruit
General Remarks
52

Organization &
Key Persons
Fruits of the Nile
Angello Ndyaguma MD
071 467499
Office 041 273274
Basic Information Relation to Banana Current Situation Potential links to
research
Export of Solar Export solar dried Sell approx five Fusarium and
Dried Fruits Sukila ndizi and tonnes per month Bacterial
Buy dried fruit Bogoya
of a mix of S Ndizi Wilt
from contact
and Bogoya. Seen as problem
farmers/groups
Ndizi seeing for research
increasing involvement
Sort, pack and
volumes.
export in
Sell solely to On farm drying
containers via
Tropical
quality is poor.
Mombassa
Wholefruits a UK Improving
organic importer wastage reduction
and distributor viewed as
important
extension /
research issue
Next steps/ Follow
up
General Remarks
53

References
Agriculture in Uganda Volume II Crops (2001) Edited by Mukiibi, J.K. Fountain
Publishers / CTA / NARO
Banana Production Manual, A Guide to Successful Banana Production in Uganda.
NARO, ADC IDEA Project
Craenen, K., Ortiz, R., Karamura, E.B. and Vuylsteke, D.R. (2000) Proceedings of the
First International Conference on Banana and Plantain for Africa. International
Society for Horticultural Science
Dijkstra, T. (2001) Export Diversification in Uganda: Developments in Non-
Traditional Agricultural Exports, African Studies Centre, Working Paper 47
Embrechts, J., Bananuka, J.A., Couvreur, Y., Bagamba, F and Lallemand, D. (1996)
Banana Sub-Sector Review. Service Contract NoSC/26/96 Final Report, Republic of
Uganda / European Union.
Gold, C.S. and Gemmill, B. (1991) Biological and Integrated Control of Highland
Banana and Plantain Pests and Disease. Proceedings of a Research Coordination
Meeting. International Institute of Tropical Agriculture.
Gold, C.S., Karamura, E.B., Kiggundu, A., Bagamba, F., and Abera, A.M.K.
Monograph on geographic shifts in highland cooking banana (Musa, group AAA-EA)
production in Uganda. African Crop Science Journal September 1999 vol. 7 No. 3
Gold, C.S., Kiggundu, A., Abera, A.M.K., and Karamura, D. (2002) Selection Criteria
of Musa Cultivars through a Farmer Participatory Appraisal Survey in Uganda.
Experimental Agriculture: 38 Cambridge University Press.
Gold, C.S., Kiggundu, A., Abera, A.M.K., and Karamura, D. (2002) Diversity,
Distribution and Farmer Preference of Musa Cultivars in Uganda. Experimental
Agriculture: 38 Cambridge University Press.
Holtzman, J.S. et al. Using Rapid Appraisal to Examine Course Grain Processing and
Utilisation in Mali. From Scott, G.J. (1995), Prices Products and People Analysing
Agricultural Markets in Developing Countries. Lynne Rienner Publishers, Inc.
Kangire, A. Karamura, E.B. Gold, C.S. Rutherford, M.A. (1996) Fusarium wilt of
banana in Uganda, with special emphasis on wilt-like symptoms observed on East
African highland cooking cultivars. From: Proceedings of the first international
conference on banana and plantain for Africa - Craenen, K. (ed.); Ortiz, R. (ed.);
Karamura, E.B. (ed.); Vuylsteke, D. (ed.) First International Conference on Banana
and Plantain for Africa, Kampala (UGA), International Society for Horticultural
Science, Leuven (BEL)
Kangire, A. Rutherford, M. (2001) Wilt-like disorders of Bananas in Uganda. Musa
Disease Fact sheet No 10. INIBAP France
54

Makerere University Banana – Based Cropping Systems Research Project No Ref
91056 (1994) Final Report Phase II
Mugisha, J. (1994) Evaluation of the Cooking Banana Marketing Structure in Uganda.
Thesis for Masters Degree of Science in Agricultural Economics of Makerere
University
Robbins, P. Ferris, R.S.B. (2002) The Impact of Globalisation on the Agricultural
Sectors of East and Central African Countries. FoodNet IITA.
Rutherford, M.A. Kangire, A. (1998) Prospects for the management of fusarium wilt
of banana (Panama disease) in Africa. From: Mobilizing IPM for sustainable banana
production in Africa: Proceedings of a workshop on banana IPM - Frison, E.A. (ed.);
Gold, C.S. (ed.); Karamura, E.B. (ed.); Sikora, R.A. (ed.) Workshop on banana IPM,
Nelspruit (ZAF), 1998 INIBAP, Montpellier (FRA) 1999
Working Document. Diagnostic Survey on Key Constraints of Banana Production in
Uganda. Preliminary data on Socio-economics, Soils and Agronomy, Pest, diseases
and plant growth, Germplasm, Post harvest. (1994) Ugandan National Banana
R001.esearch Programme, IITA and NRI
Zake, J.Y.K., Nkwiine, C., Sessanga, S.M., Kasenge, V and Bwamiki, D.P. (2000)
Soil Research for Sustainable Banana Production in the Heavy Soils of Uganda.
Faculty of Agriculture, Makerere University. Uganda.
55

Appendix 1
Banana Survey Checklist
Topic Sub-Topics Questions / Comments
Personal Information Name
Physical Address
Telephone
Type of business Value addition
Physical functions
Experience
Demand Quantity
Type of buyer
Seasonality
Variety
Consumer Preferences
Price data
Supply -Source by area
-Source by type of
person
-Price
-Quality
For established firms try to get a business card, or
mobile phone No. for purposes of future reference
How does the respondent add value along the market
chain? Does he change the form of product
(processor) or just move the product (transporter)
or just store the product (wholesaler) or is he a
retailer or consumer. Is there any vertical
integration?
-Quantity sold normally e.g. Per day, week,
-To whom do you sell?
-Are there changes in volume of sale over time?
-Are there different varieties?
-If so what is their respective demand / preference
-What is the price variation as per variety differences
-Are there changes in prices over time?
-If so what are the reasons?
-Do you find problems selling your products?
-If so which ones?
-Which are your supply areas (geographically)
-From whom do you buy?
-From where do you buy? (Meeting pt.)
-At what price do you buy the variety?
-Does the price change over time? If so why? &
How?
-Do you have problems getting products? If so which
are they?
-What is the quality of products along the chain?
Quality -Perishability
-Post harvest issues -What is the shelf life of the products
Storage -Quantity
-How much do you usually store?
-Time
-For how long?
-Storage problems -Do you have any storage problems?
-Do you experience storage losses?
Transaction costs -Forms
-What are your transaction costs?
-Proportions
-What is their proportion?
Grading & Sorting Grading incentive -Do you grade or sort?
-Do better grades fetch higher prices?
Market Information -Sources
-Do you get market info? (e.g. on prices?)
-Spatial arbitrage -If so from whom and how?
-Is there a relationship between prices in different
areas at a given time
Price Formation Market power -Who determines the price?
-How is the price determined?
-If firm / individual is a price taker, find out why?
Institutional & legal Associations -Do you belong to an association?
framework
-Are there any market regulations? If so which are
they and how do they affect your business?
Market Structure Competition No of sellers
-Is there price competition
-Is there non-price competition? If so how
(interlocking markets)
Credit availability Sources & Type -Are there any credit institutions
-Do you use them?
-What are their rates of interest?
56

Appendix 2
Market Chain Interviewees Contact Name
Fruits of the Nile Angelo Ndyaguma, Nathan Production Manager
Africa Organics / Amfri Farm Amin Ahivji (MD) / Moses Kigundo (Prod Manager)
Sun-Trade and Consulting Int (U) Ltd Mr Fritz Plattner
TEFU (Tropical Ecological Foods Uganda) Sam Nyanze is chairperson
Icemark Africa Ltd Kristjan Erlingsson
Ugandan Breweries George Farmu (Distilleries Manager)
Owino Market Mr Kayiira (Market master), various traders
Kalerwi Market Jakob Kwakonye, various traders
Nakawa Market Various traders
Luwero Two producers, two traders
Kyazanga One producer
Masaka Beer producer and farmer
Mbizzinnya road side market
Roasting banana traders
Rubaare Collection Center
Various traders
Ruti
Bicycle Traders and Broker
Kampala Waragi and Tonto Markets Various traders
Institutions / Organisations Contacted
ADC IDEA Project Steve New, Harriet Nsubuga, Fred Ssango
FIT Uganda Mark Blackett
IITA Dr CS Gold
INIBAP Guy Bloome
Kulika Charitable Trust Alistar Taylor
Makerere University Dr J Mugisha
Makerere University Dr Serie Maranga
Makerere University JW Muwanga
Makerere University Prof PR Rubaihayo
NARO Tushemereirwe W.K.
NARO Coordinator of On-Farm Banana Research Ngambeki Dezi
57

Appendix Three
Volumes Exported Uganda
Matooke Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Total
Matooke
Total
Fresh
Exports
% Of Total
Fresh Export
Volume
1997 26,188 33,663 41,002 31,126 18,225 27,197 41,258 55,655 49,960 45,978 44,847 36,129 451,228 1,174,850 38%
1998 48,124 32,871 40,349 30,887 30,288 42,434 42,697 40,892 31,796 35,406 52,702 59,066 487,512 1,717,472 28%
1999 52,019 53,577 48,904 32,217 43,434 58,188 67,830 60,853 58,131 68,390 58,926 62,090 664,559 2,424,217 27%
2000 66,556 64,560 74,290 76,689 72,509 68,728 62,058 63,789 61,510 82,879 76,788 84,542 854,898 2,598,854 33%
2001 59,731 48,344 51,652 74,663 73,413 59,535 84,377 84,621 75,328 73,291 73,050 71,060 829,065 2,311,243 36%
Apple
Banana Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Total
Apple
Banana
Total
Fresh
Exports
% Of Total
Fresh Export
Volume
1997 7984 6018 17441 11320 10463 17554 11493 11415 16859 14437 12286 6454 143,724 1,174,850 12%
1998 12432 5484 6067 7772 11933 8986 11581 7180 12643 8564 8300 6067 107,009 1,717,472 6%
1999 9769 9751 7270 5818 6046 8859 9502 8260 6222 7300 6677 5490 90,964 2,424,217 4%
2000 5536 5064 3762 4614 7907 8712 8202 5424 5230 7047 6529 4662 72,689 2,598,854 3%
2001 3648 3461 4254 6498 5528 6936 9881 11694 10439 10764 9187 6628 88,918 2,311,243 4%
Source: Civil Aviation Figures supplied by IDEA project
58

Appendix Four
US$ / kg
5
4.5
4
3.5
3
2.5
2
1.5
1
0.5
0
Figure xx UK Matooke and Apple Banana Prices
M A M J J A S O N D J F M A M J J A S O N D J F M A
2000 2001 2002
Matooke Apple Banana
59

Appendix Five
Volumes and Values of Waragi Market in Kampala
Kampala
Depot
Estimated
Litres Waragi /
Week
Total
Annual
Volume
(Litres)
Total Retail Annual
Value (Ug Sh)
Nankulabye 22,000 1,144,000 1,716,000,000
Kisenyi 8,000 416,000 624,000,000
Rubaga Road 2,000 104,000 156,000,000
Kamwokya 4,000 208,000 312,000,000
Ndeeba 2,000 104,000 156,000,000
Kawempe 1,800 93,600 140,400,000
Total 39,800 2,069,600 3,104,400,000
Waragi Values calculated at an estimated retail value of Ug Sh 1,500 / litre
Volumes and Values of Tonto Market in Kampala
Estimated
Litres Tonto /
Total
Annual
Volume
(Litres)
Kampala
Total Retail Annual
Depot Week
Value (Ug Sh)
Kisenyi 20,000 1,040,000 572,000,000
Ndeeba 1,600 83,200 45,760,000
Kawempe 4,000 208,000 114,400,000
Nakulabye 1,600 83,200 45,760,000
Total 27,200 1,414,400 777,920,000
Tonto Values calculated at an estimated retail value of Ug Sh 550 / litre
60