Rwanda is well positioned to seize a share of the market for passion fruit in Europe, according to a study by Manufacturing Africa in collaboration with various Rwandan government agencies.
Demand for passion fruit in European markets is estimated at about 375,300 tonnes per year, which translates to about $861 million. Ghana, Madagascar and South Africa are currently the main African suppliers of passion fruit to Europe. However, according to the study, demand for passion fruit in high-value markets is sufficiently strong to allow for the entry of new producing countries.
Rwanda boasts of very low and low slope land, ideal for the production of passion fruits. Purple passion fruits grown in Rwanda are the preferred variety in EU markets. Varieties from Colombia (currently one of the biggest exporters to the EU) are mostly used as puree or juices due to their high acidity while the purple variety grown in Rwanda, Kenya, and South Africa is favoured for fresh consumption.
Rwandan passion fruit also has a seasonality advantage during months of light supply in Kenya and South Africa.
Financial analysis: Exported fresh passion fruit
The export of fresh passion fruit to the EU can fetch a gross profit margin of 48%, assuming a wholesale price of $4,840/ tonne. The farmgate price is in the region of $700/tonne but driven by a variety of factors including yield, supply volume, and produce quality. Transport costs to the EU are approximately $1,800/tonne if the exporter takes advantage of RwandAir’s subsidised tariffs.
Financial analysis: Exported passion fruit juices
Passion fruit juices can also be processed and exported to European markets from Rwanda at reasonable margins.
Passion fruit juice can fetch a gross margin of 32% at a wholesale price of $15,000/tonne. Total production outlay is about $10,000/tonne, while transport costs are in the region of $150/tonne, assuming transport from Kigali to Dar es Salaam by road ($93/tonne) and then to Europe by sea freight ($57/tonne).
Rwanda competitive advantages
According to the study, Rwanda’s competitive advantages to produce high-value crops for premium export markets include:
- Ideal climatic conditions and seasonaily advantage. Rwanda has fertile soil, a wet climate and a mild temperature.
- Horticulture is a strategic sector for the Government of Rwanda, with several fiscal and non-fiscal incentives available.
- Competitive labour market. Wages are $1.30 to $2.60 per day for unskilled labour and $300 to $450 per month for specialist staff.
- RwandAir has daily flights to Europe and the Middle East that are available to export high value crops. The cost of air freight from Kigali to any destination is $1.8 per kg.
- Improving infrastructure. Rwanda is the third country in Africa in terms of road quality with a commitment to continue improving road infrastructure. The rural feeder roads programme has enabled Rwanda to go from 1,000 km of unpaved roads in poor condition in 2012, to 1,824 km additional paved roads, and more than 2,000 km of newly rehabilitated and all weather unpaved roads in 2018. Additionally, the government has committed to building a road within 2 km of each farm by 2028 (30,000 km of road in 2028 vs 13,350 km in 2015).
This article summarises findings from a Manufacturing Africa report. Manufacturing Africa is an FCDO funded programme looking to support investment into the manufacturing sector across Kenya, Ethiopia, Rwanda, Uganda, Nigeria and Senegal. For more information about Manufacturing Africa, investment opportunities, or additional sector deep dive studies please consult the website at www.manufacturingafrica.org