Exporters shift market but rue flight costs, tight competition

Monday October 25 2021
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Losses incurred by the exporting companies are extended to farmers who grow vegetables and fruits for export. PHOTO | FILE

By Ange Iliza

As Rwanda shifts from exporting to Europe to selling its produce to the Middle East, exporters are a worried lot, saying they are incurring losses due to high costs and tight competition from Kenya and Uganda.

Exporters say while Dubai and Qatar are market opportunities for Rwanda’s horticulture and high value vegetable and fruit, Rwandan products are priced higher than other countries in the region because flights are expensive.

Clients prefer Kenyan and Ugandan similar products since they are cheaper.

“It costs us twice as much to export the same volume of avocados as Kenyans to Dubai and Qatar markets. Other traders use water transport while RwandaAir is our only transporting option and a more expensive one,” said Frank Rwigamba, director of operations at Souk Farms, an exporting company based in Rwanda.

For example, one packet of avocados by Souk Farms on the Dubai market costs $11 while it a similar product from other countries in the region goes for $8.6.

Souk Farms can export 10-30 tonnes of avocados per week. However, due to space and the fact that RwandaAir only goes to Dubai three times a week, they can only transport 5-10 tonnes of avocados.


“We have shifted from the European market to the Middle Eastern because it is untapped and more flexible. But if transport remains this costly, we will not satisfy the market,” Mr Rwigamba said. Ripple effect Losses incurred by the exporting companies are extended to thousands of farmers who grow vegetables and fruits for export.

In the case of Souk Farms, about 1,700 farmers scattered across the country are affected.

“Our failure to expand and pay contractors affect over 1,500 farmers that Souk Farms works with. We have laid off some contractors,” Mr Rwigamba added.

Rwanda’s export market in the Middle East is only a few years old. According to statistics, since 2019, Rwanda’s exports, say, to the United Arab Emirates, have exploded in growth from less than $50 million in 2018 to over $340 million in 2019.

Kenya and Uganda’s exports to the Middle East stand at $1.8 billion and $381 million, consecutively.

Rwanda’s Private Sector Federation told Rwanda Today that while there are challenges in transport, the Commerce Chamber is looking into facilities and incentives.

“We are planning to hold meetings to discuss some of the issues, including export cost. We will also discuss if we can advocate for transport alternatives and cost,” said Joseph Akamuntu, head of the Chamber of Commerce and Services at the Rwanda Private Sector Federation.

The director general of Trade and Investment at the Ministry of Trade and Industry, Antoine Kajangwe, said Rwanda is supporting exporters to reach the Middle East market.

“Under market linkages, the Ministry facilitates exporters to attend trade fairs and exhibitions, organize trade missions and business meetings with UAE buyers and markets in various countries,” Kajangwe said.