By Nelson Mandela Muhoozi
Uganda’s vanilla fields might hum with the delicate fragrance of orchids, but beneath the floral charm lies a sh113 billion annual market ripe for the picking, despite its fluctuating prices at the international market.
Uganda produces between 250 tons-300 tons of cured vanilla beans annually. In 2021, the country exported 189.180 tons of cured vanilla valued at $21.55million (about sh81billion) according to Bank of Uganda statistics of 2023, placing her in the 2nd position in Africa.
However, under the current market conditions, Uganda is still able to generate an annual foreign revenue of between $12million (about sh45.2billion) to $18 million (about sh67.8billion) from export of cured vanilla.
During stable market conditions the market ranges from $100 (sh380,000) per Kilogram, with a forecasted revenue of $25 million (about sh94.1bn) to $30 million (about sh113bn).
Price fluctuations
Investors with a taste for navigating the spice trade can find lucrative opportunities in Vanilla. However, like any agricultural venture, vanilla farming comes with its own set of challenges.
Fluctuations in global prices, dependence on fickle weather patterns, and logistical hurdles can test even the most seasoned investor.
However, thorough market research, strategic partnerships with local stakeholders, and a flexible approach can help turn these challenges into steppingstones according to the Minister of State for Agriculture, Fred Bwino Kyakulaga.
Kyakulaga said while addressing the Press on issues concerning vanilla growing and protection recently, that ensuring quality of the crop, and harvesting vanilla at the right time will help enhance the revenue from vanilla.
“Uganda’s vanilla market beckons with the promise of high returns and a chance to be part of a vibrant culinary story. By understanding the market dynamics, investing in key areas, and prioritizing sustainability, investors can savor the sweet rewards of Uganda’s vanilla bounty while contributing to the nation’s economic growth and prosperity,” he said.
Vanilla statistics
Most of Uganda’s Vanilla is exported to the European Union and the United States of America markets. Over 99.9 percent of the produced Vanilla is exported. For this reason, Kyakulaga said quality should be central during vanilla production.
The 2022 Food and Agriculture Organization of the United Nations’ statistics place global production of vanilla at 6,843 tons, with Madagascar being the leading producer (78%, Uganda (9%), Papua New Guinea (7%), Indonesia (3%), Mexico (2%) and India (1%).
Global demand as of 2023 stands at 12,286 per annum with Uganda’s market share ranging 150 million tons – 300 million tons (5% – 15%) of the global supply with high possibility of expansion.
The global vanilla market size is projected to reach $4,701.91 million by 2030, growing at a Compounded Aggregate Growth Rate (CAGR) of 5.7% during the forecast period (2022-2030).
Harvesting season starts
Kyakulaga announced the start of the harvest season for Vanilla. The harvesting season, he said, starts January 5, 2024, and will run up to April 5, 2024.
He warned farmers against harvesting Vanilla when it is not ready. Harvesting immature Vanilla, Kyakulaga said, is a bad vice that should be avoided. “No body will buy immature Vanilla because it is worthless,” he said.
Errant middlemen
According to the Agriculture Ministry, Uganda has about 65,000 vanilla farmers scattered across the 38 districts, especially in the East and Western parts of Uganda. These include: Kayunga, Mukono, Buikwe, Jinja, Mbale, Wakiso, Bukomansimbi, Kalungu , Masaka, kasese, kyeniolo, Bundibugyo, Ntoroko, Bunyangabu, lbanda, kamwenge, Kazo, Kitagwenda, Mbarara, Sheema, Bushenyi, Rubirizi, and Kanungu, among others.
“I have heard about mafias that exploit farmers even when the global market is okay. You find some middlemen cheating farmers in the villages, I have heard about this, and we are doing something about it,” Kyakulaga said.
To combat this issue, the farmers have been argued to do the harvesting at the appropriate time so that they are in the market legally allowed time.
Prossy Tumushabe from the Association of Vanilla Exporters in Uganda said they are educating farmers in the 38 vanilla growing districts including Kasese, Kamwenge, Kagadi, among others, to inform them in advance of the prices globally.
She urged the farmers not to believe the mafias who come with varying messages from what the Agriculture Ministry has announced.
In districts like Kagadi, Kasese and Kamwenge where the Vanilla ripens faster, the state minister encouraged the farmers not to harvest the vanilla without an extension worker available to supervise the activity.
Police intervention
According to minister Kyakulaga, the Police are going to be involved in the supervision of Vanilla harvesting to ensure that the right quality of vanilla is maintained.
Ssebambulidde Charles, a commissioner in Police and the commandant agricultural Unit said that as a force they are prepared to enforce the proper functioning of Vanilla harvesting.
“We have the communication system and channel that we can use to enforce regular vanilla harvesting. The system of the police is on the ground,” he said.
Registering vanilla farmers
The agriculture ministry has embarked on a process to register all the Vanilla growers in the country. “There is already a circular going to districts to register vanilla farmers with the aim of tackling the challenges in the sector,” Kyakulaga said.
The process, he said, will help to follow up on the issues facing the farmers. However, he noted that the main intervention is to provide a conducive environment and provide a regulatory environment that can support the sector.
Vanilla profitability
A vanilla plant takes 3 years to the first harvest, and it requires an initial capital of sh8 million to establish one acre of a coffee -vanilla intercrop and two more million for garden maintenance and pollination during the second year.
A farmer spends approximately 10 million before the first harvest. On the first harvest a farmer harvests 3kg of beans per plant, from the 450 in an acre an estimate of 1,350kg can be harvested in the first year.
If sold at the current lowest vanilla price of sh5,000, a farmer earns sh6,750,000 per season from the sale of vanilla beans annually and if sold at the highest price as of last season of sh20,000 a farmer gets sh45,000,000 per season.
In another scenario, if you don’t intercrop, Kyakulaga said that a well-established vanilla garden under good management each vine yields approximately 5kg. If you do quick mathematics, a farmer will earn an average of sh22,500,000 annually at the lowest price of sh5,000 per Kilogram and sh90,000,000 annually from the highest price of 20,000 Kilogram respectively as for last season in 2023.
Even when the prices go down, the farmer in vanilla production will get a profit a profit according to Kyakulaga. In addition to the revenue from vanilla, he argues that a farmer will still earn from the sale of other intercrops such as Coffee, Banana etc.
Value addition
Although the prices have recently been discouraging, Godfrey Kigoye, a vanilla farmer based in Kyotera said signs now show that demand is knocking on the door.
This year, Kigoye said, they anticipate the situation to normalize. “We are looking forward to this coming harvest season between January and April as prices are likely to be exciting,” he said.
Kigoye grows vanilla on three and half acres and says that opportunities for vanilla growers lie in value addition.
“This time round some farmers are mobilizing themselves and learning value addition with the help of experts and the government to prepare for opportunities in the value chain,” he added.
Since 2016, Uganda has recorded a rapid increase in vanilla exports ranging from 0.65 to 75.4 tons every year from the estimated number of 50,000 farmers who have since grown vanilla from around 2,000 in 2015, especially the youths.
The plant is such a highly prized commodity and its prices have been soaring in the last two years due to Covid 19.
According to Kigoye, the lowest kilogram of vanilla went in 2021 was Sh120,000 (for dry vanilla). For fresh vanilla, he says prices ranged between Sh30,000 to Sh50,000.
“Am calling upon our people not to lose hope, vanilla is counted among the top cash crop for Uganda and a production per acre is more productive than that of coffee,” he said.
Kyakulaga told farmers not to cut down their vanilla plants, noting that prices will become better soon. He noted that every ten years, the prices of Vanilla fall.
