Building Resilience in Agribusiness Exports

Seun Rasheed, founder of SOUK Farms, shared insights into exporting agricultural products from Rwanda to European and Middle Eastern supermarkets. The journey involves navigating financial challenges, market dynamics, and rigorous certification requirements.

The agribusiness landscape is particularly demanding in Africa, where high cash-flow needs and volatile wholesale markets can threaten even established businesses. According to Rasheed, of Rwanda’s 10 largest agricultural exporters when SOUK Farms was founded in 2019, only four remain operational - a testament to the industry’s unforgiving nature.

The Cash Flow Challenge

SOUK Farms sources produce from both its own farms and approximately 2,000 smallholder farmers. A significant hurdle is managing cash flow: customers typically pay 30-90 days after delivery, while expenses like farmer payments (often due immediately), packaging costs (paid in advance), and airline fees (7 days maximum) must be settled sooner.

“You can’t tell a smallholder farmer to wait for 30 days before they get paid,” Rasheed explains. “They generally expect payment the day after their produce is collected.” This creates a financing gap that SOUK Farms manages through careful planning and relationships with financial institutions.

Wholesale vs. Retail Markets

While wholesaling offers lower barriers to entry, it exposes exporters to price volatility and unreliable payments. Rasheed notes that buyers may reject shipments or demand discounts when market prices decline - a risky proposition for businesses with tight margins.

SOUK Farms initially used wholesalers but strategically shifted to direct retail sales through supermarket chains like Morrisons, Co-op in the UK, and Edeka in Germany. This provides more predictable revenue streams and better margins, though it requires greater investment in compliance and certification.

The Retail Onboarding Process

Securing contracts with major retailers takes time - typically 2-3 years from initial contact to product placement - due to extensive audits and certification requirements. SOUK Farms spends over $50,000 annually on certifications alone.

Rasheed emphasizes the importance of building strong relationships with both farmers and buyers based on trust and mutual benefit. By prioritizing quality, reliability, and ethical sourcing, businesses like SOUK Farms can create sustainable value chains that support African agriculture’s growth.