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Uganda’s Grain Market: Opportunities and Obstacles

ugandas grain market opportunities and obstacles
ugandas grain market opportunities and obstacles
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Uganda’s Grain Market Growth and Challenges

Tuesday, October 10, 2023

Key Points:

  • Uganda’s grain market shows promise for expansion despite concerns about weather, agricultural practices, and productivity.
  • Formal and informal grain exports have experienced fluctuating revenues in recent years.
  • A recent market research report predicts substantial growth in Uganda’s grain market size.
  • Challenges such as post-harvest losses, infrastructure limitations, and aflatoxin contamination persist.
  • The government is actively seeking investments and policy improvements to boost the grain industry.

Year Total Exports (Billions USD) Grain Contribution to Exports (Million USD) Grain’s Percentage of Total Exports (%)
2016 2.9 284.3 9.8
2017 3.45 401.3 11.6
2018 3.6 436.8 12.1
2019 4.0 275.4 6.9
2020 4.28 243.2 5.7

The grain market in Uganda is poised for growth despite concerns about variable weather conditions, outdated farming equipment, and productivity issues. Data from the Ministry of Trade, Industry, and Cooperatives reveals that formal and informal grain exports have seen fluctuating revenues in recent years, with a peak of $4.28 billion in 2020.

Before the 2020 decline, beans, legumes, maize, sorghum, sesame seeds, and beans were among the leading contributors to formal and informal exports. The impact of the COVID-19 pandemic was more pronounced on informal exports.

A Market Research report indicates that Uganda’s Grain Market size is expected to grow from $4.27 billion in 2023 to $5.22 billion by 2028. The government aims to achieve higher targets with the 2023-2027 National Grain Trade Policy Implementation Strategy.

The grain sector plays a vital role in job creation and income generation, but it faces challenges such as post-harvest losses, inadequate infrastructure, and limited access to finance. Despite the National Grain Trade Policy being in place for seven years, constraints persist due to financial limitations.

The government is implementing initiatives to modernize agricultural infrastructure, enhance storage and processing facilities, and promote value addition. It seeks to attract investors in various aspects of the grain industry.

Uganda’s efforts extend regionally and continent-wide to strengthen ties and cooperation for grain trade beyond its borders. Data collection, production diversity, standards enforcement, and seizing global trade opportunities are key priorities.

Grains grown in Uganda include maize, millet, sorghum, rice, wheat, sesame, green gram, soybeans, and chia seeds. Investment opportunities abound in production, input supply, value-added processing, standards compliance, export, and post-harvest handling.

Aflatoxin contamination has been a concern, leading to restrictions on Ugandan grains in regional markets. The Eastern Africa Grain Council suggests proper drying and the establishment of a grain authority to enforce standards.

Uganda and Tanzania are the only grain surplus producers in the region, highlighting Uganda’s potential to contribute significantly to the grain trade value chain. Uganda’s fertile land can potentially feed 200 million people, but cultivation on arable land remains limited.