rwanda national export strategy - minicom

RWANDA NATIONAL EXPORT STRATEGY
expanding factory capacity to process green leaf, but also in terms of processing new tea types to ensure
product diversification. The strategy also states the need for improved marketing of teas by targeting
specific channels for high-end teas. The GoR continues to support training for management of
cooperatives, and for agronomists, auction publicly owned factories and supports packaging efforts in
Dubai. Several private firms are moving to higher value teas and organics. The NES prioritises the
following issues to enable stakeholders to reach export targets.
Priority Issues and Challenges
Issue #1 Improve yield and quality of green leaf. A key constraint to increasing production and
processing is fertilizer: its cost, availability, suitability and distribution, and costs have spiked by 300% in
the past two years thanks to gasoline prices and other variables. Green leaf quality is compromised by
poor farming practices, which will require training and/or better incentives to farmers, 53 as well as
transport methods. Agronomist training can help improve the quality.
Issue #2 Improve the quantity and quality of made tea. In order for factories to be able to reach
targets of tea produced, capacity will need to be almost doubled. Three factories have recently expanded
production, but more needs to be done, as some factories turn away from green leaf due to capacity
issues.
Issue #3 Reduce the cost of production. The cost inputs and machinery that are mostly imported
(labour, power, and transport) are higher than other countries in the region, yet Rwandan teas have to
compete on an even keel with Kenyan teas in Mombasa.
Issue #4 Target markets with diversified value-added products through developed distribution
channels. The oversupply of bulk black tea on international markets is likely to worsen over the next five
years. Rwanda needs to move from producing almost solely bulk black tea, the majority of which is sold
at auction producing better quality teas, to producing diversified teas including green, white or orthodox
teas, and branded Rwandan packaged teas, which are sold directly to buyers using strong relationships.
4.3.3 COFFEE
Rwanda‘s coffee industry is a traditional export and a priority sector for the GoR and its partners. Rwanda
has excellent growing conditions for Arabica coffee, which is evidenced in the growing number of awards
its specialty coffees receive, its increased demand worldwide, and the higher premiums paid. More than
10% of Rwanda‘s coffee is now fully washed; most of it falls in the category of specialty coffee and is in
high demand from gourmet roasters, and retailers such as Sam‘s Club and Starbucks.
Over the last decade, export receipts from the coffee sector have averaged US$58M and held steady as
one of Rwanda‘s major foreign exchange earners. However, rising international prices for coffee are
currently compensating for a now dropping national yield. Coffee revenues generated US$56M in 2010.
This is an increase from US$37M in 2009, but it was hampered by an extended dry season in some coffee
producing areas. 54 While increased investments in the sector increased the productivity from 0.7 tons of
green coffee / hectare over the last decade, soil acidity, lack of distribution of appropriate fertilizer and
cyclical coffee production cycles currently conspire to bring yields down.
According to the 2009-2012 national coffee strategy developed by MINAGRI, OCIR CAFÉ, and the OTF
Group, revenues are projected to reach US$115M by 2012. The NES projects more conservative
revenues, reaching $US 89M in 2012, due to downward revisions of current production levels and other
factors. Increasing the quantity and quality of coffee as well as developing value added products (e.g.
fully washed coffee, roasted packaged coffee) will be critical to the continued success and future growth
53 Per the Strategy, in addition to approximately $250,000 allocated for training and $85,000 for farmer incentives by OCIR-Thé, there is a gap of
US$750,000 for related agronomist support and worker training through 2013,. Through training on plucking, the Pfunda factory increased
yields by 16%.
54 Comments attributed to the Director General OCIR-CAFÉ, Alex Kanyankore in The New Times Daily Newspaper, October 6 th 2010, page 4.
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