In our efforts at 249Startups to generate information , data and opportunities in Sudanese markets , We have launched series of forums where we will be hosting experts, Corporate executives and entrepreneurs to detect challenging areas and market gaps, and identify what opportunities lie within it, and to provide market insights and know-how on approaching specified subjects. In this series , we will be having experts and specialists to present their ideas, solutions, and also their vision for the future of Sudan in terms of Technology.

The Technology Incubation Program is implemented in both Sudan & Rwanda and funded by the African Development Bank Group (AfDB) , Korea-Africa Economic Coorporation  and Enable youth program , which aims to develop and promote the use of technology in agriculture.

In sudan The program Implemented by Frankfurt School for Finance and Management and 249Startups, and our private sector partners CTC Group, Nile Bank, and the Federation of Chambers of Agriculture and Animal Production.

And, with the call for applicants for the Technology Incubation Program is live we are considering how the upcoming program cohort can address these challenges as well as the needs of the country in agriculture sector.

This is done with the aim of equipping the participants with explicit knowledge about the identified markets and widen their horizons by communicating the different opportunities which lie within them, and try to direct them towards working in areas that are currently a priority for government , development & private sectors .Additionally, encourage the participants to develop solutions to address the identified challenges and gaps in the industry.

 


First Forum : Access to Markets Forum

In our this forum presented by 249Startups, At the beginning of this series, Access to Market will be the first topic for discussion we were pleased to have :
-Dr. AbuBakr Hussain, Researcher and Consultant, business and development economics, with more than 30 years of experience in the fields of marketing, financial inclusion, and business development economics. PhD holder from Humboldt University in Berlin, Germany in the field of financial services marketing.
-Dr. Murtada Kamal Khalaf Allah Khalid, Expert in Agriculture and Animal Production, and the General Secretary of the Steering Committee of Chambers Federation of Agriculture and Livestock Employers Association. PhD holder in Agriculture, University of Stuttgart – Germany 1996.
-Khaled Mamoun Ibrahim, Partner and Chief Financial Officer of Gulf Hills Trading. Master’s degree holder in Finance and Financial Law, and has been an expert in agricultural commodities for more than 7 years.


The discussion topic was around Access to markets in Agriculture sector and its role in Economic Development as an important and essential factor.
This webinar is an opportunity for entrepreneurs to learn about the opportunities available in these paths. Watch the full webinar and reach the summary of discussion points .

Watch Full Webinar now Online

Supply side challenges

  • Farm size
    • Commodity type
    • Aggregators
    • Index’s
  • Central market
    • Obied
    • Omdurman
    • Gadarif
  • Quality
    • QC control

Telecommunication made it difficult for arbitrators to control the market, which is good for the market. There’s no standards for the crops, just general specifications, so there’s no reliable check it’s the buyer’s responsibility to check the quality of the product.

Logistical and operational challenges

  • Capacity of ports
    • Khartoum international airport
    • Port Sudan
    • Land crossing
  • Internal logistics
    • Rail
    • Road transport
      • Diesel Shortage
  • Distribution of value addition and processing
    • Khartoum concentric
    • Shelling facilities for example, in order to shelling out in good quality you have to transport the property to Khartoum which adds more cost

There’s a lot of value that can be added to exports , meat for example,  most of our exports are livestock, or freshly slaughtered meat. Also, the regulations are one of the big challenges, road transportation is connected to the shortage of diesel as well as the road taxes which results in un competitive prices, Rail is more efficient. Also all processing  facilities are in Khartoum, so all products must be shipped to Khartoum then to export which adds more costs.

Client acquisition and market challenges

  • Trust and history of performance
    • Two way street
    • Brokers

The trust issues between the clients and suppliers result in the broker’s role. Brokers work for their own interest, and they’re able to manipulate the market through practicing pressure.

  • International reselling and value addition
  • QC challenges
  • Regional competition

The self regulated standards make it difficult to compete regionally.

Exports Conclusion

  • The variability of supply, quality, prices led big companies and conglomerates moved the entire chain in house, because of the unpredictable process and supply.
  • Forwards and futures are a hit or miss, as an example the agriculture bank when contracting with the farmers sometimes they don’t receive products because farmers prefer to sell to the market with a higher price margins.
  • Orders of magnitude of value being left on the table. there are a lot of added value processes that can be done to products instead of exporting them raw.
  • All bulk commodities tarred with the same brush.

 

Value chains overview

80-90% of agriculture in Sudan is traditional, it needs to be transformed into agricultural businesses. It’s also crucial to determine the approach of value chain application. Low productivity results in uncompetitive prices.

Challenges

  • Competitive prices
  • Transportation
  • Lack of market information
  • Lack of storage facilities
  • Lack of processing

Sorghum

  • Pre production inputs
    • Machineries
    • Seeds
    • Fertilizers
    • Pesticides

The farmers don’t harvest, because there’s shortage of machinery, fertilizers, and pesticides.

  • Production
    1. 50% of planted lands
    2. Production average is 5 million tons per annum

Sudan has 50-60 million acres, 22 million are desiccated to sorghum, and produce only 2 sacks per acre. Another problem is that most of the exported or locally used crops are being sold raw without adding any value.

  • Storage
    1. Silos 200 thousand (4%)
    2. Storage houses (4%)
    3. Matmora (92%)
      * Loss 25-30%.

Most storage factories are dedicated to Wheat, which occupies a large area and produces also a very low productivity. Sorghum has only 4% of storage houses available, the rest is stored the traditional way (matmora) which results in 20-30% loss due to bad storage conditions.

  • Processing
    • Mills
      • Only one modern mill
    • Animal feed
    • Glucose and starch

Also, almost all processing facilities are accumulated in Khartoum.

  • Marketing
    • Raw exports (200$ per ton)
    • Quality

Lack of market information contributes to low productivity.

Cattle

  • Production
    • 130 million head a year
    • 1% traditional grazing ( urgent need for water supplies and veterinary care)
    • 7% almost modern grazing
    • 2% modern grazing
    • Target is 6 million live cattle and 500 thousand tons slaughtered.
  • Primary markets
    • Secret auction, by piece
    • Auction and neighborhood balance
  • Transportation – Major markets
    • Transportation is done walking on hoofs for 2000 km
    • There’s 40% loss
  • Slaughtering facilities
  • Marketing
    • Primary markets
      • In rural areas
      • No brokers
    • Major markets
      • In cities
      • Livestock brokers and dealers
    • Final markets
      • Mowealh market for cows
      • AbuZaid market for lamb
      • Controlled by brokers

Solutions

  • Priorities the commodities
  • Value chain analysis to determine the gap
  • Contract farmers
  • Commodity markets
  • Commodity boards

There must be a board that brings together all the stockholders ( organisation, government, finance institutions) to determine each commodity specific market to limit the waste of resources.We need to organize ourselves, select our 5 main commodities and concentrate on them in order to compete.

Markets Access during COVID19

  • Supply vs demand
    • When is the product being delivered?
    • Where is it being delivered?
    • At which cost?
    • What is the quality of the product?
  • Price mechanism
    • Nature of the product
    • Market access
  • Domestic vs international
    • COVID19 affected domestic and international markets

Industrial organisation approach (SCP)

  • Structure

Market structure differs according to the nature of the products

  • Conduct

Depends on the structure

  • Performance

Conduct and market manager

Impact of COVID19

  • Impact of the lock-down
    • Affected the marketing mix
    • How to satisfy the demand
    • Limited both suppliers and demanders as well as workers
  • Impact of demand reduction
  • Extent to which loss of income pushes people to poverty

The Economic crisis due to COVID19 resulted in more poverty, which led to demand reduction.

  • Extent of
    • Bankruptcies
    • Job cuts, a lot of people lost their jobs during the pandemic
    • Reduction in the economic activity, due to the lockdown and other safety procedures
    • Business cash flow
    • Debt problems, no window to pail out .
  • The impact at the household level in terms of
    • Income poverty
    • Multidimensional poverty
    • Extent of deprivation

This Article had been developed by 249Startups  Team for purpose of learning and sharing knowledge as part of Markets Opportunities Mapping Forum  .

 

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