Tanzania’s grains market, opportunities and challenges

• Grains market growing exponentially in Tanzania.
• Key players remain to be smallholder farmers and traders.
• Tanzania and Burundi ink grains market development MoU.

At the moment, the grains market in Tanzania is valued at $6.7 billion, and is expected to grow tremendously over the next couple of years. According to business consultancy firm KensResearch, the trend of the grains market in Tanzania is based on a five-year historical analysis that associates the increase primarily to domestic consumption, improvements in agricultural productivity, and government initiatives aimed at enhancing food security.

“The market has seen a steady rise in demand for staple grains such as maize, rice, and wheat, which are essential for both human consumption and animal feed. Maize remains the dominant crop, with rice and wheat also gaining importance as dietary preferences shift and urbanization increases,” the report elaborates.

The Tanzania grains market is dominated by a handful of strategic trade regions, these are Dar es Salaam, mainly because it is the country’s commercial capital and a port city. Then you have areas that facilitate imports and exports like Mwanza and Arusha which are also crucial centres for production, processing and distribution.

However, all credit for the increase in grain production and overall market is the Tanzanian government’s strategic directives such as the National Agricultural Policy, which “is designed to boost grain production through improved farming techniques, access to quality seeds, and investment in research and development,” the report details.

According to the analysis, “recent government budgets have allocated substantial funding—estimated at over $200 million—for agricultural research, infrastructure, and sustainability initiatives in the grains sector.”

In Tanzania, the grains market can be segmented into about a dozen types, but the primary staples and commercial grains are maize, rice, wheat, sorghum, millet, and pulses. “Among these, maize is the most dominant type due to its significance as a staple food in Tanzania. The increasing population and urbanization have led to a higher demand for maize, which is used for both human consumption and animal feed,” the report says.

It also notes that of late, rice and wheat are gaining traction in the local market and this is particularly in urban areas where dietary preferences are shifting as urbanization gains speed.

Tanzania grains market key players

In Tanzania, the grains market is dominated by a large mix of regional and international players the likes of Tanzania Grain Traders Ltd., East African Grain Millers Ltd and the Export Trading Group (ETG). Others include the Tanzania Grain Board, Mkulima Mbunifu Co. Ltd., Kilimanjaro Native Cooperative Union (KNCU), Tanzania Seed Company Ltd and the., Mohamed Enterprises Tanzania Ltd. (MeTL Group).

As for government agencies in the grains market there is the National Milling Corporation Ltd., Tanzania Food and Nutrition Centre, Tanzania Agricultural Research Institute, Tanzania Cooperative Development Commission, Tanzania Export Development Authority, and the Ministry of Agriculture which is the main stakeholder and driver of innovation, sector expansion, and overall regulations.

In this regard, the ministry has recently seen Tanzania shake hands with Burundi to deepen cooperation in the agriculture sector and particularly in the grains market industry. The agreement was announced during discussions between Tanzania’s Deputy Permanent Secretary in the Ministry of Agriculture responsible for Crop Development and Food Security, Dr. Stephen Nindi, and the Permanent Secretary of Burundi’s Ministry of Agriculture and Livestock, Emmanuel Niyungeko.

The agreement was made recently when a Tanzanian delegation visited Burundi where they discussed Tanzania’s ongoing strategies to increase food production through the Agricultural Master Plan 2050 (AMP 2050) and the 10/30 Agenda. “We are implementing nationwide soil health testing to identify soil types and determine appropriate inputs for each area,” Dr. Nindi told media after the meeting.

The official added that they had agreed with their counterparts to prioritize irrigation farming and in this area he said there are over 750 projects currently underway. He also cited enhancing the Tanzania Plant Health and Pesticides Authority (TPHPA) to ensure the quality of grain entering and leaving the country meets international standards.

Other priority areas cited by the diplomat include improving the use of agricultural machinery in which case he said there is already the purchase of 1,000 heavy-duty tractors and 1,000 hand tractors been carried. Lastly he said, the two countries have established shared agricultural equipment centers that will operate under cooperative unions.

“Tanzania and Burundi have significant opportunities for cooperation in developing grain trade to strengthen food security across the region,” he summed up.

The importance of a collaborative frameworks can be over emphasized when it comes to addressing food security in the region, especially if you take into account the fact that the region has varying climates and crop production cycles.

This fact has been emphasized by the Director of the Department of Economic Diplomacy at the Ministry of Foreign Affairs and East African Cooperation and Chairperson of the Advisory Board of the National Food Reserve Agency (NFRA), Ambassador John Ulanga.

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The U.S. Grains & BioProducts Council in Tanzania

The ambassador is quoted pointing to the significance of having the U.S. Grains & BioProducts Council in Tanzania which he said shows the significant long-term growth potential of the grains industry in the country. “Since 2014, the Council has been engaged in Tanzania, utilizing U.S. Department of Agriculture Food for Progress (FFPr) program funds.

Through its FFPr program, the Council has worked to support the development and modernization of domestic feed and poultry production in Tanzania,” he detailed.

According to the ambassador, other than the FFPr program, the Council works with local organisations and industry stakeholders to alleviate various production and market access bottlenecks.

Pointing to the fact that by 2050, Africa’s population is expected to have doubled, increasing from 1.2 billion today more than 2.5 billion sustained economic development through agriculture is of key priority, the ambassador says.

He noted that; “Changing demographics, including a growing middle-class, will increase demand for high-protein foods, as well as grains,” he went on to say. Summing up, he said; “A key component of the Council’s work in Tanzania, and in East Africa more broadly, is working with local and regional livestock and feed associations to develop future markets for U.S. coarse grains and co-products.”

Notably, grains marketing in Tanzania is dominated by a large number of small-scale  private traders who, however, have not been able to exploit the opportunities offered by both surplus production or the growing markets.

“Capturing such opportunities depends on the existing pattern of relationship between producers and traders in the marketing system but that is not all, the agricultural marketing infrastructure needs improvement and the trader’s net margin remains low,” he lamented saying until these hurdles are addressed the grains industry will remain below potential.