Feasibility study for cocoa marketing at Rungwe Cooperative Union

10-08-2015 It is early in the morning and curly mists playfully wrap themselves around the mountains that surround Tukuyu town. The fertile mountain hills are covered by dozens shades of green plants and an endless number of banana trees. The rains have stayed out for a while and the red brown road gives off thick layers of red dust on the houses and vehicles, leaving gritty traces on the leafs of coffee or banana trees. While Agriterra's business advisor Ibrahimu Mwankanye and the general manager of Rungwe Union are tangled up in an animated discussion about politics, our driver professionally takes one after another sharp curve on the road. We are on our way to one of the member cooperatives of Rungwe Cooperative Union to speak with cocoa producers and the management of the cooperatives about the pressing situation concerning the marketing of their cocoa beans.

Rungwe Cooperative Union is an organization that consists of approximately 2000 active members who have their farms in the Rungwe district and Busokelo district in the southern highlands of Tanzania. The union’s main focus is coffee collection and marketing, but it is also committed to engage more in cocoa marketing, as four of the twenty member cooperatives are committed to cocoa collection and marketing.

Currently, the members of these cocoa producing cooperatives do not deliver their cocoa beans to the organization, but to local collectors (Njemke) and agents of exporters instead. Only five exporting companies are buying cocoa in the region and competition between them is fierce. And as there is hardly no difference in the prices paid by the exporters to the cooperatives, agents and Njemkes, the cooperatives have to strategize how to be of any added value to supplying members. Therefore, they have asked Rungwe Cooperative Union to help them with directly selling the cocoa beans to overseas buyers. But how to do this without having any experience in cocoa exports?

There are some challenges to overcome before the union will be ready to market cocoa beans directly to importers worldwide. This week we have focused on mapping the value chain and calculating costs and benefits from farm level to the port in Dar Es Salaam. We have spoken with the management of the cooperatives and members, made an inventarisation of their challenges and needs, and closed the week with an analysis of the organization’s strengths and weaknesses and opportunities and threats related to cocoa marketing. 

The recommendations that come out of this visit will give the management of the union and the member cooperatives some guidance to take the next steps towards reaching their goals. And opportunities there are! The cocoa growers in this region are blessed with the ideal circumstances of producing one of the finest cocoa beans in the world. With the growing interest for the country’s produce from the international cocoa market, this might just be the right time for the union to take action.

Lisanne Oonk (Advisor at KIT)