Where are opportunities for exporters in 2014?

Rwandas 1,294 exporters generally had good business year in 2013. They can do even better in 2014. According to the Ministry of Trade monthly performance report for the first ten months of 2013, merchandise exports from both formal and informal trade accounted for $583.1 million, which was 25 per cent more than the value of exports during the same period in 2012. The rise in export receipts helped the economy record a 10 per cent decrease of the merchandise trade deficit in the ten month period. The government plans to foster further exports trade in order to narrow the balance of payment deficit. According to Rwanda Revenue Authority (RRA), the number of exporters has increased from 851 in 2011 to 1,294 in 2012/13; but trade is still dominated by only thirteen large exporting firms. The National Bank of Rwanda (BNR) statistics suggest that between July 2012 and June 2013, the 13 large sharks each exported in excess of $10m which accounted for 49 per cent of total exports of $672 million that year. There’s a need to help the majority of small exporters with useful information about markets if they are to increase their share of export trade in 2014. Cash cow Earnings from Rwanda’s traditional exports of mainly Coffee, Tea, Cassiterite, Coltan and Wolfram increased by 35 per cent, from $213.3 million in the first ten months of 2012 to $287 million in 2013. This year, minerals are expected to take the lead again with Coltan as the main cash cow. This projection is based on last year’s performance where growth in mineral exports benefited from a 161 per cent increase in Coltan exports that saw the sector single-handedly turn in $196.3 million in the first ten months. Coltan had a good year because of a 20.4 per cent rise in the price per kg with an overall increase of 160.9 per cent in its exports’ value that helped fetch $121.3 million. Cassiterite is another potential cash cow this year if it maintains its form of the first 10 months of 2013, where its value increased by 13 per cent thanks to a 9.7 per cent increase in price per kilogramme. The mineral brought in $50.5 million. Meanwhile, wolfram dealers will need more volumes to cash in because of the mineral’s 13.8 per cent slump in price per Kilogram that hasn’t recovered since 2012. Nonetheless, a 24.7 per cent growth in wolfram volumes helped fetch $24 million in the first ten months of 2013 which was 7.4 per cent more than the previous term. Coffee and tea With a set annual target of over $85milion, coffee exports disappointed with receipts of $44.7 million in the first ten months of 2013. Last week, NAEB reported that November coffee earnings dropped to $5.3m (Rwf3.6b) from $7.3m (Rwf4.9b) earned in October. This would mean the commodity’s unlikely to earn beyond $55million with only December statistics missing. It means coffee exporters should possibly diversify to other commodities as international coffee prices suffer a two-year decline which might continue into 2014 or recover just slightly. Tea exports weren’t any better in the first ten months of 2013 posting a value slump of 15 per cent. This is attributed to both low prices and quantity. Between January and October, the average price of tea was down by 8.1 per cent per kg made worse by volumes that fell by 7.7 per cent, according to the trade ministry. Therefore, 2014 is likely to be another wobbly year for tea exports hence a need for exporters to make informed decisions. Where are hot export markets? The major destinations for Rwandan exports for most of 2013 are most likely to remain available in 2014. DR Congo is likely to be a large market this year. With relative peace returning to Goma, Gisenyi border will be busy again clearing both exports and re-exports such as clothes and petroleum products. Demand for food commodities such as flour and meat will also thrive. This projection is based on the fact that Congo continued to be Rwanda’s largest single export destination in 2013 with an 81 per cent increase over 2012 pushing its share of total exports to 17 per cent with top demand for non-traditional exports and re-exports. Trade within the EAC is likely to bubble as implementation of the tripartite agreements among Kenya, Uganda and Kenya on free movement and single visa register early results. Beyond EAC, the European market for Rwandan minerals is likely to remain strong after increasing by 12 per cent last year. With prospects for minerals largely positive, Europe will be a major fixture for 2014. But exporters should pay attention to the emerging market for Rwandan minerals in Asia. Last year, Asian market share of Rwandan exports increased from 11 per cent in 2012 to 21 per cent as a result of increased exports of minerals which accounted for 90 per cent of all export to Asian. Hides and skins followed. The Middle East and Americas remain small but growing markets for exporters to court. Despite uncertain futures for coffee and tea, there’s certainly hope for Rwanda’s exports in 2014.