Coffee to boost Uganda’s foreign exchange revenue in 2016

Saturday February 13 2016

A farmer harvesting ripe coffee beans in Mbarara. Uganda’s coffee production is expected to increase to 4.8 million bags in 2016. PHOTO | MORGAN MBABAZI

A farmer harvesting ripe coffee beans in Mbarara. Uganda’s coffee production is expected to increase to 4.8 million bags in 2016. PHOTO | MORGAN MBABAZI 

By DOROTHY NAKAWEESI

Uganda’s ranking among the world’s top coffee producers is expected to improve as the country prepares to produce a record 4.8 million bags this year.

According to a report by the International Coffee Organisation (ICO), the 27 per cent increase in production is attributed to increased acreage of land under coffee bushes.

Uganda Coffee Development Authority (UCDA) executive director Henry Ngabirano told The EastAfrican that the country’s coffee output jumped from last year’s 3.7 million bags to 4.8 million bags this year.

UCDA’s director of strategy and business development Norman Basobokwe Mutekanga noted that in the past five years, there has been an increase in coffee plantation covering at least 239,175 hectares of land.

Experts said the increased production is a boost to the country’s leading forex exchange earner. Coffee production had declined to just over two million bags in the past five years.

Experts observed that coffee sector is expected to become competitive and attractive globally, especially at time when the prices are falling. Global prices have been falling since the beginning of January last year. The average composite grade stood at 140 US cents, and by December 2015, had dropped to 114 US cents.

“Increased volumes will mitigate the falling prices on the global market,” said Joseph Nkandu, the executive director of National Union of Coffee Agribusinesses and Farm Enterprises (Nucafe).

Uganda is Africa’s leading exporter and second biggest producer of coffee after Ethiopia.

Ethiopia’s coffee is mainly consumed locally.

Uganda has seen its production average 3.3 million bags in the past 20 years, with the highest production being 4.2 million bags in 1996/7.

If the 4.8 million bags is produced this year, Uganda will move up one or two places among the world’s top 10 producers.

In 2015, Brazil led the pack at 2.7 million tonnes, followed by Vietnam at 1.6 million tonnes, Colombia at 750,000 tonnes, Indonesia at 540,000 tonnes, Ethiopia at 397,500 tonnes, India at 344,760 tonnes, Honduras at 279,000 tonnes, Mexico at 240,000 tonnes, Uganda at 240,000 tonnes and Guatemala at 210,000 tonnes.

The projected increased production will enable Ugandan farmers to realise increased incomes as the price for the new output is projected at $2 per kilogramme. This means each 60kg bag will fetch $120, and the country’s projected earnings will be at about $576 million, up from $444 million earned in last year.

Coffee production constitutes 20 per cent of the Ugandan national export revenues.

Uganda has approximately 500,000 smallholder coffee farms, each covering less than 2.4 acres. At least 1.7 million households depend on the coffee production as their main source of income.

According to Mr Nkandu, Uganda has the potential to produce more coffee provided that factors like weather remain predictable.

“We need to come up with solutions to the unpredictable weather such as applying irrigation systems at all times,” he said.

In Uganda, the Coffee Wilt Disease (CWD) and the Red Blister Disease have hit the crop and seen production go down.  CWD, a fungal infection, wiped out more than 12 million Robusta coffee trees, the mostly grown variety in the central and western regions, towards the end of the 20th century.

Disease resistant

As a result of this, the National Agricultural Research Organisation has been developing disease-resistant varieties.

“Pests and disease control in the coffee growing areas is the crucial factor once this is achieved, we shall see more coffee on the market,” Mr Nkandu added. 

He further attributed increased coffee production to the knowledge farmers have acquired over time on how to take care of their crop right from the farm, harvesting and exporting directly to the markets.

Global production this year is estimated to be 143.4 million bags. This will represent a recovery of 1.4 per cent compared with last year, which was revised downwards to 141.4 million bags.

“Total production of Arabica is relatively unchanged at 84.3 million bags compared with 84.4 million last year, as lower production of Brazilian naturals is matched by increases in Colombian milds and other milds,” the ICO report notes.

ICO expects a significant increase of 3.7 per cent in Robustas, with both Vietnam and Indonesia provisionally estimated to produce 27.5 million bags, up from 26.5 million bags in 2014/15.