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Sunflower Value Chain Analysis Report for Dodoma Urban, Kongwa and Kasulu Districts

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Sunflower Value Chain Analysis Report for Dodoma Urban, Kongwa and Kasulu Districts LOCAL INVESTMENT CLIMATE PROJECT SUNFLOWER VALUE CHAIN ANALYSIS REPORT FOR DODOMA URBAN, KONGWA AND KASULU DISTRICTS FINAL DRAFT CONDUCTED BY MRA Management Associates With contributions from: Charles Ogutu, Sunga Mabeja, Dr. Victor George, Cliff Laizer, James Genga, Alice Muro and Onesmo Kenneth Final Draft Sunflower Value Chain Analysis submitted to LIC-Confidential TABLE OF CONTENTS ABBREVIATIONS AND ACRONYMS ................................................................................................ 4 EXECUTIVE SUMMARY ................................................................................................................. 7 1. INTRODUCTION ..................................................................................................................... 9 2. METHODOLOGY .................................................................................................................... 9 3 AN OVERVIEW OF KASULU DISTRICT COUNCIL ..................................................................... 10 4. OVERVIEW OF KONGWA DISTRICT COUNCIL ........................................................................ 12 5. OVERVIEW OF DODOMA MUNICIPAL COUNCIL .................................................................... 13 6. OVER VIEW -OILSEEDS ......................................................................................................... 15 6.1 World market prices for edible oil CIF Dar es Salaam for the last 5 years ........................... 16 6.2 Tanzania Oil Seed production ............................................................................................... 16 7. SUNFLOWER OVERVIEW ...................................................................................................... 17 7.1 Product Description and Uses ............................................................................................... 17 7.2 Overview of the World Production of Sunflower Oilseeds ................................................... 17 7.3 Role of sunflower in Tanzanian economy ............................................................................. 19 7.4 Participants of the sunflower oil value chain ........................................................................ 19 8. PRODUCTION OF SUNFLOWER IN TANZANIA ....................................................................... 20 8.1 Regional Production Trend .................................................................................................... 20 8.2 National Demand and Supply for edible oil .......................................................................... 21 9. THE SUNFLOWER VALUE CHAIN ........................................................................................... 23 10. MARKETING ISSUES ............................................................................................................ 33 10.1 Refined versus Unrefined Sunflower oil ............................................................................... 33 10.2 Segment for Crude and Refined oil ....................................................................................... 34 10.3 Packaging of Sunflower Seed Oil ........................................................................................... 35 11. EXPORTS AND IMPORTS OF EDIBLE OIL AND OILSEED PRODUCTS......................................... 36 11.1 Import trend for edible oils ................................................................................................... 36 11.2 Price for Edible Oils ............................................................................................................... 37 11.3 Export of Edible oils ............................................................................................................... 37 11.3.1 Exports to Kenya ............................................................................................................ 38 11.3.2 Exports to Burundi ......................................................................................................... 39 11.3.3 Export of Sunflower Seeds ............................................................................................. 40 12. Sunflower Market system in Dodoma- (Kongwa and Municipal) .......................................... 41 Final Draft Sunflower Value Chain Analysis submitted to LIC-Confidential 13. Value Chain Supporters and Stakeholders in Dodoma, Kongwa and Kasulu .......................... 42 13.1 Current Supporters of the Sunflower Value Chain in Dodoma and Kigoma regions ............ 42 13.2 Processors Associations in Dodoma and Countrywide ......................................................... 44 14. VALUE CHAIN GOVERNANCE ............................................................................................... 45 15. SERVICE MARKET ................................................................................................................ 47 15.1 Financial Services .................................................................................................................. 47 Requirements ................................................................................................................................... 47 Existing institutions .......................................................................................................................... 47 15.2 Technology Service Providers ............................................................................................... 48 15.3 Business Development Services (BDS) .................................................................................. 48 16. INVESTMENT REQUIREMENTS TO DEVELOP SUNFLOWER IN THE STUDY AREAS ................... 50 17. GROSS MARGIN ANALYSIS ................................................................................................... 52 Final Draft Sunflower Value Chain Analysis submitted to LIC-Confidential ABBREVIATIONS AND ACRONYMS AMCOS Agricultural Marketing Cooperative Society ASA Agricultural Seed Agency BDS Business Development Services CBOs Community Based Organisations CEZOSOPA Central Zone Sunflower Processors Association CPO Crude Palm Oil DADPS District Agricultural Development Plans DAICO District Agriculture, Irrigation and cooperatives Officer DIDF District Irrigation Development Fund EPZ Export Processing Zone ESRF Economic and Social Research Foundation EU European Union FAO United Nations Food and Agriculture Organisation FSU Former Soviet Union FTC Farmer Training Center GAPs Good Agricultural Practices GHP Good Hygiene Practices GMP Good Manufacturing Practice HA Hectare KDC Kongwa District Council KEPHIS Kenya Plant Health Services Kg Kilograms KIA Kilimanjaro International Airport LGA Local Government Authority LIC Local Investment Climate Project Final Draft Sunflower Value Chain Analysis submitted to LIC-Confidential M4P Making Markets for the Poor MAFSC Ministry of Agriculture Food Security and Cooperatives MFI Micro Finance Institutions MRA Management Resource Associates Limited MT Metric Tonnes MUVI Muunganisho wa Wajasiriamali Vijijini MVIWATA National Network for Farmer Groups in Tanzania NGO Non Governmental Organisation PHS Plant Health Services PMO-RALG Prime Minister’s Office, Regional Administration and Local Government QDS Quality Declared Seeds RLDC Rural Livelihood Development programme SACCOS Savings and Credit Cooperative Society SCF SME Competitiveness Facility SIDO Small Industries Development Organisation SME Small and Medium Enterprises SNV Netherlands Development Organisation T Tons TANESCO Tanzania Electric Supply Company TASUPA Tanzania Sunflower Processors Association TBS Tanzania Bureau of Standards TCCIA Tanzania Chamber of Commerce, Industry and Agriculture TEOSA Tanzania Edible Oil Seeds Association TFDA Tanzania Food and Drugs Authority TORs Terms of Reference TOSCI Tanzania Official Seed Certification Institute Final Draft Sunflower Value Chain Analysis submitted to LIC-Confidential TRA Tanzania Revenue Authority TZS Tanzanian Shillings UNIDO United Nations Industrial Development Organisation USAID PCP Processing and Consumption Project of USAID VC Value Chain VICOBA Village Community Bank Final Draft Sunflower Value Chain Analysis submitted to LIC-Confidential EXECUTIVE SUMMARY The Local Investment Climate (LIC) is a new development project being managed by NIRAS with mandate to contribute to an improved Business Climate in Tanzania. As a result of the foregoing mandate, sunflower value chain study was commissioned by LIC to MRA Management Associates so as to get a clear, up-to-date picture of the sunflower VC in Tanzania. The study focus districts were chosen by LIC to be Kasulu, Kongwa and Dodoma urban. The study findings are expected to provide inputs into the design of interventions that seek to overcome constraints for the growth of local agricultural economies through sunflower value chains in the targeted LGA’s. The Objective of the study was to get a clear picture on production and productivity, demand and supply chain, legal and policy framework as well as supporting institutions. All these are anchored on a purpose to increase the profit among all sunflower VC actors. The study findings indicate that, sunflower is the 4th largest edible oil that is consumed in the world. Ukraine topped the world production of sunflower at 11 Million metric tones (2013) and contributes 29% of the world production. Tanzania on the other hand is leading African countries in production and was the 10th largest producer of sunflower seeds with a
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