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Uganda: UCDA Looks to Emerging Economies
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East African Business Week (Kampala)
17 December 2007
Posted to the web 17 December 2007
Stephen Nuwagira
Kampala
As Uganda positions herself to stay as one of the leading quality coffee producers, the Uganda Coffee Development Authority (UCDA) is shifting its attention from the more developed markets to new and emerging coffee markets.
According to UCDA, the apex body in charge of promoting the country's coffee, doing business with the emerging economies of the Middle and Far East like China, Indonesia, Egypt, Algeria, Sudan and Libya is convenient and cheaper than focusing on the developed markets.
UCDA managing director, Mr. Henry Ngabirano told East African Business Week last week that shifting attention to the emerging economies is more beneficial in the long term because they have the greatest potential of growth and coffee consumption than markets that already buy and consume markets. He added that they don't have a perception problem against products from third world countries; it is easier for them to accept Uganda's coffee without unnecessary restrictions.
"Though our coffee is world class, we find problems marketing it in the more developed countries because they perceive all products from the third world as inferior," he said. "It's only natural that Uganda focuses on markets in the Arab world, North Africa and Far East where consumers don't have this bias."
He added that UCDA is making strategic interventions to boost efforts by private businesses promoting Uganda's coffee in these regions so that they can have the capacity needed to serve the market demands.
He said that Uganda's coffee exports were to increase by over 300% in China over the last three years and grew by 57% in 2006 because of such strategic investments.
According to the report for the 2006/2007 coffee year released recently by UCDA, Uganda exported 2.7 million bags of coffee worth US$257 million in the coffee year 2006/2007, recording an increase of 35% and 51% in volume and value respectively as compared to just over two million bags of coffee worth US$170 exported during the last coffee year, 2005/2006.
The US, Japan, Sudan and the European Union (US) were the four major destinations of Ugandan coffee. Coffee remains one of the top foreign exchange earners for Uganda.
Ngabirano also revealed that UCDA is working on a master plan to make Libya and Egypt springboards for sale and promotion of Uganda's coffee in the Arab world.
Algeria, which hitherto hasn't been given much attention, shall be given special consideration because it is one of the biggest coffee consumers in Africa.
He pointed out that because of massive demonstrations done in the last few years; Uganda's coffee can now occupy shelf space in leading supermarkets across the world. Ugandan made instant coffee brands like Rwenzori coffee and Star coffee, are making big in-roads in China, Europe and Middle East markets, he said.
However, he said that more work needs to be done by government and the private sector to change the attitudes and perceptions of the Europeans and Americans to penetrate their markets and to improve the quality of Uganda's coffee and the marketing chain.
Ngabirano said that Uganda's coffee is not competitive in the market place because of lack of proper handling practices and poor attitude by many Ugandans towards work.
Uganda is the seventh coffee producer in world with its Robusta coffee ranked number one in the world.
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Ngabirano revealed that the coffee wilt disease, which had devastated the industry about ten years ago has been greatly tamed and is no longer a threat.
The expert pointed out that UCDA is also focusing on reducing poor handling of coffee through sensitization of the farmers and provision of tarpaulins from where they can dry the coffee to maintain its quality.
He said that Uganda's Arabica coffee is not doing well on the world market because of this problem, adding that buyers prefer Arabica coffee from Rwanda, Ethiopia and Kenya because they have better handling practices.
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