Determinants of Gross Margin of Watermelon Traders in Kampala, Uganda

Watermelon is one of the most important tropical fruits, very nutritious and traded globally. Despite of its importance worldwide, watermelon trade faces challenges accrued from its transportation, poor storage facilities and lack of organized marketing system. This study on market performance of watermelon was conducted in the six selected markets of Kampala district. The study objectives were to; establish socioeconomic characteristics of watermelon traders, compute gross margin and marketing margin of watermelon trade along selected value chain and determine factors influencing watermelon gross margin. Simple random sampling was used to select 90 retailers stratified by the selected markets and retail trade levels and 30 wholesalers. Data was collected using a structured survey questionnaire, analyzed using descriptive statistics marketing margin, multiple linear regression and gross margin analysis. The finding reveals that they were more men than females and zebra F1 was the most traded variety. Generally, the determinants of retailers’ Gross margin were gender of the traders, age in years, education, membership of trade association, watermelon variety, financial source, record keeping and storage facilities access significantly influenced the retailer’s gross margin at p>0.01, p>0.05 and p>0.10, levels of probability in the selected Kampala markets, Uganda. The study established that average prices charged at the farm gate, wholesale, retail stall, retail wheelbarrow and retail small truck level were UGX 1,054, UGX 1,952, UGX 3136, UGX 5,899 and UGX 3,164 respectively. Overall, the retail prices are higher than the farm gate prices. The marketing margins of the stall traders, wheelbarrow traders, small truck traders and wholesalers of watermelon was UGX1183, UGX3947 and UGX1212 and UGX898 with percentage share of 39%,68%,39% and 15% respectively. The study concluded that socioeconomic characteristics of watermelon traders do affect gross margins of traders, watermelon trade is profitable with gross margins above 55% for the selected value chain actors thus great market performance and watermelon retail price is greater than farm gate price. The study suggested that watermelon traders should pursue membership to associations and seek financial assistance to expand operational scale. The government should adopt watermelon export promotion strategies that aim at improving storage facilities, promote mostly production, trading Zebra F1 variety in Kampala district and traders should embark on accurate record keeping since it is a parameter in finance access. There is a need to conduct further research on the effects of government policies on gross margin and export volumes of watermelon.