EAX in search of grains to meet soaring demand

There isn't enough supply stock of grains, especially maize, in the country to meet the massive demand for the farm produce.
Maize corns undergo post-harvest sun drying. There is low supply of grains compared to demand in the country. (File)
Maize corns undergo post-harvest sun drying. There is low supply of grains compared to demand in the country. (File)

There isn't enough supply stock of grains, especially maize, in the country to meet the massive demand for the farm produce.

The New Times understands Kigali-based East Africa Commodity Exchange (EAX) has since resorted to outsourcing from external suppliers in the region to get the required volumes.

EAX is a regional commodity exchange platform that links smallholder farmers to agricultural and financial markets and secure competitive prices for their products as well as facilitate them to access financing opportunities.

Farmers lagging?

Rwanda took the lead and invested in facilities to ensure the market agency was headquartered in Kigali to benefit the most of local farmers.

But, ironically, farmers are yet to make the most of the facility and a huge demand for local grain begs them for more supply of soya, maize and beans.

Dr Kadri Alfah, EAX country manager, though, says the demands are not being met as farmers hardly respond to messages calling for the grains.

“Based on the demand we have and the volumes we are receiving presently, Rwandans are yet to fully exploit the benefits of this exchange facility,” says Dr Alfah.

The Ghanaian has been in the country for four months. He has vast commodity market experience from various African countries, including Ethiopia and Ghana.

Inside his office, one can’t miss the several grain samples of maize, soya and beans in polythene bags on a table. It’s like a specimen laboratory for a seeds researcher, but he’s not bothered.

“You can see my office lacks the feel of a country manager, but that is on purpose, we want to operate ordinarily just like the farmers we aim to work with,” the Ghanaian says.

The grain samples in his office are of the best grade that he would like to get from suppliers not only in Rwanda and the region but he’s yet to achieve that, he adds

For the past couple of weeks, the marketing agency has been running adverts in the local press calling for suppliers who are interested in supplying soya, beans, rice and maize but they are yet to get satisfactory feedback.

“We have about 40 suppliers at the moment but most of them are small timers and can’t be relied on to get the kind of volumes that we need,” he says.

Recently, a buyer approached EAX looking for 10,000 metric tonnes of soya, but this demand hasn’t been fulfilled by local suppliers, forcing EAX to look to Tanzania and Malawi.

There’s similar demand for beans but even more for maize. According to Alfah, EAX has the capacity to trade between 10,000 to 20,000 metric tonnes of the grain daily, but supply is wanting.

“We are currently trading just 2,000 metric tonnes of maize per month, this is obviously very low but we are investing in increasing awareness, improving capacity and interesting the facility to local dealers,” says Alfah.

At least 77 per cent of Rwanda’s population is employed in the agriculture sector, but many are still entrapped in poverty because their earnings don’t correspond with their hard work.

Alfah thinks he knows why.

“It’s because when farmers harvest, they have huge volumes but no storage facilities. Then the brokers come calling with exploitative prices but since farmers want quick money, they sell off, lowly. This is the infamous informal sector,” he says.

Rwanda reportedly produces about 450,000 metric tonnes of maize every year but only 40 per cent of it is taken to warehouses for storage.

EAX reckons it can attract at least 80 per cent of that yield and make use of the fifteen warehouses it has located in Kayonza, Karongi and Nyanza districts with a silo in Kigali that government extended to them.

These facilities with a storage capacity of over 20,000 metric tonnes can be used freely by farmer groups or cooperatives as EAX links them to buyers at good prices. These are yet to be fully utilised.

But Tony Nsanganira, Agriculture state minister, says EAX should continue doing what it says it’s doing, building relations with farmer groups and making them see the sense of doing business with EAX.

“Commodity exchange is still new to Rwandans and we’re working closely with EAX to promote its services to farmers and dealers, its work in progress,” he says.

The minister also said EAX, being a regional initiative, should have no difficulty getting grain from other countries in the region when supply is short in Rwanda.

Local grain processors such as Sosoma and Minimex are already doing the same. They can’t find enough grain supplies locally so they are looking to Tanzania and Uganda to fill the gaps.

Claude Mansell, managing director of Minimex, says they require 2,200 metric tonnes of maize monthly, of which at least half of the supplies come from Tanzania and Uganda. It’s a similar scenario at Sosoma where they have to buy soya beans from Uganda.

So far, EAX is working with about 9,000 maize and bean growers who are members of at least 2,000 farmer cooperatives.

Farmers speak out

Emmanuel Kazungu, the head of Eltland, a maize growers’ Sacco in Rwamagana, says they have the supplies and that the group produces between four and five tonnes annually. He says they have been selling elsewhere because they did not know about EAX.

“Initially, we were selling to dealers in Nyabugogo who take the maize to Uganda and other countries but we have been told that we can earn more if we delt with EAX,” says the farmer.

Kazungu also admits the dealers offer lower prices claiming that it’s because of high fuel prices and bad roads.

“Members think EAX will be a better partner given that it’s working with government but we didn’t know them before until recently,” he says. Immaculate Mwanzita, president of Cohunya, a cooperative in Kigabiro Sector in Rwamagana that produces up to 56 tonnes a season, says they also only recently learnt about EAX.

“They talked to us and going by what they tell us, we are ready to work with them as long as they give us good value. We have been selling our produce to Rwanda Grains and Cereals Corporation but we are always looking out for the best price,” says Mwanzita.

Mwanzita’s group currently sell their grains to informal middlemen at Rwf230 per kilogramme.

But for EAX, Alfah says they do not fix prices.

 

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