Export capabilities in Rwanda and Burundi in partnership with TMEA
Posted by Richard Anstead on 18 July 2018
For the last two years we have been working in partnership with TradeMark East Africa (TMEA) to strengthen the export capabilities of coffee coops in Rwanda and Burundi. Our work has supported these coops across a number of areas including attaining certification, connecting farmers to specialty markets, improving quality and production and developing traceable supply chains for coffee grown by women. We have been working deep in the field in both countries as well as exploring new markets for their coffees and connecting them with a wide range of specialty buyers in Europe, the US and in Asia.
In 2016 Twin attended for the first time the 'World Specialty Coffee Conference and Exhibition' in Japan. This was also a great opportunity to meet our Japanese buyers Alter Trade Japan and Zensho Holdings Co.
As this programme ended with took a step back to look at the challenges that all coffee producers from the two origins face as they try to build their export capabilities. A full copy of our Export Capability Study report can be found here.
Our field work and validation workshop held in Kigali in May 2018 has shown that specialty coffee represents an important market for Rwanda and Burundi. Both of these ‘exotic’ origins can and do produce some fantastic coffees, very much capable of being defined as ‘specialty coffees’ and commanding a premium in the international market. Our recent report of Smallholder and Specialty Markets tells your more about the opportunity for cocoa and coffee farmers from the growing specialty market place. There are however a number of challenges that both countries need to address is the potential at stake is to be captured for smallholder coffee farmers.
Field work and validation workshop in Kigali, May 2018
Logistics, infrastructure and quality need to be improved in order to compete with more established coffee markets in neighbouring countries.
Burundi’s geography favours the growing of high quality coffee grown at high altitude but buyers are cautious and nervous of the challenges of sourcing there. Smallholder farmers need access to the skills needed to access international markets, access to finance and national policies that support the industry grow.
In Rwanda there is the same need to professionalise, increasing capacity at washing stations and ensure that quality and supply is reliable.
At our closing workshop with expert stakeholders from governments institutions from both countries, NGOs, private companies, donor and farmers representatives which included NAEB, ARFIC, and InterCafe we made the following recommendations;
- Farmers productivity and livelihoods
Productivity and profitability of coffee farms can be improved by implementing global best practices for agricultural practices, rejuvenation and inputs. Certification could improve prices for farmers, but should be implemented in partnership with roasters to ensure a return on investment.
For improved livelihoods and resilience, we would recommend to implement diversification on farms as well as for other supply chain actors. This should allow a response to climate change, complement coffee seasonality, and increase overall income.
- Supply chain inefficiencies and access to finance
Coffee washing stations in both countries are operating inefficiently under their installed capacity for a number of reasons. Firstly, total installed capacity is higher than total coffee production in the countries. Secondly, locations are not always appropriate with longer distance to farms, further reducing sufficient supply of cherries and affecting coffee quality. Thirdly, a lack of working capital reduces capture rates for cherries. Cooperatives that are managing coffee washing stations could be supported in first mile logistics from farm to washing station, as well as access to finance. Increased coffee productivity will further improve processing efficiency.
Improving access to finance across the supply chain is expected to increase the share of fully washed coffee for the specialty segment, by removing the incentive to sell semi-washed coffee to local traders at a low price.
Especially for Burundi, government policy is not understood by all supply chain actors and appears inconsistent. Taxes are relatively high, and its proceeds do not appear to flow back to the coffee sector.
- Differentiation and innovation
Especially for Rwanda, quality alone is not sufficient to distinguish its coffee in the market. Interventions focusing on certification, women’s coffee and processing innovation will improve its positioning and grow the market demand.
Rwanda and Burundi are relatively unknown as coffee origins. Market positioning is critical. TWIN Trading and other ethically driven traders are playing an important role in raising awareness with buyers and providing marketing materials for individual cooperatives. Government and industry associations could play a role in positioning the countries better as a whole in the specialty coffee market.
Value addition through roasting for the local market is and emerging opportunity. Local roasting would however need a minimum scale and significant investment. In addition to agribusiness opportunities, tourism is a growing sector especially in Rwanda.
Through Twin’s regional hub in Kigali and with partners such as TMEA we will carry on working in both countries. Twin, and it’s trading subsidiary Twin Trading continue to work with smallholder coops helping them access the support they need.
Our Rwanda team at the Kigali office
If you are interested in working with us please contact with our Head of Region in Kigali via MattiaGuglielmi@twin.org.uk or reach us at firstname.lastname@example.org