Dorothy Nakaweesi
23 June 2009
Kampala — Uganda's leading overall export earner, coffee, has suffered a wave of hostile weather leading to a decline in volumes.
Now, coffee experts say revenue forecasts for May and June may not be met as dealers could miss out on premium prices due to poor quality.
In a new coffee report for the month of May from the Uganda Coffee Development Authority (UCDA), there was a 5.7 per cent drop in Robusta quantities from 1.7 million bags to 1.6 bags after a four-month dry weather spell hit Robusta coffee-growing areas in the country.
Uganda is African's second largest coffee producer after Ethiopia and Robusta coffee takes a bigger share.
Experts say Uganda's coffee now faces a market nightmare as the dry spell is bound to affect the quality of coffee beans and therefore its price at the international market.
Mr Moses Ssabwe Walusimbi, the export manager of Great Lakes, one of the leading exporting companies, in an interview with Daily Monitor said; "The weather spell affected the quality of coffee. This is why we were not able to export enough and those of us who had bigger volumes were pulled out of the race on premium price because of the relatively low quality".
The May Robusta volume suffered a 4.7 per cent drop. The previous eight months from October 2008 to May 2009 registered a 0.37 per cent increase in export to 2,078,754 bags, compared to a similar period last year.
"The corresponding value however, fell by 16.4 per cent from $242.4 m (Shs521 billion) to $202.8 m (Shs436 billion) in tandem with the global price movement," the UCDA report said.
However, in the last three years, Arabica coffee made a 30 per cent increase over Robusta. "The rise was largely due to adoption of improved agronomic practice supported by good weather conditions, coffee planted continuing to come into production and a noticeable reduction in the incidence of pests and diseases," the report reads.
On a year-to-year basis, coffee exports in the twelve months (Jun/May 2008/09) totalled 3.22 million bags, of which 81 per cent were of Robusta and the rest Arabica.
"This indicated an improvement of 7.7 per cent compared to a year ago when 2.99 million bags were recorded," the report said.
Prices
The weighted average price of coffee dropped from $155 cents per kilo in April and March to $153 cents this is despite Arabica making price gains in the period over Robusta.
"Organic Robusta fetched the highest price of 180 cents/kilo followed by washed Robusta at $153 cents, an improvement from $176 cents for organic. In the case of Arabica coffee, Organic Okoro realised the highest price of $247 cents/kilo, followed by Bugisu AA at $227 cents, down from $203 cents and $222 cents respectively recorded in April 2009," the report said.
Uganda's top ten companies together held a market share of 92 per cent, down from 94 per cent in the previous month. The number of registered coffee exporting companies in 2008/09 went up from 29 to 37, the new ones being Coffee World Ltd., Ankole Coffee Processors Ltd., Ankole Coffee Produce Co-op Union Ltd., LD Commodities Ltd., Yaka (U) Ltd., Green Holdings, Bagain (U) Ltd., and Queen Commodities Ltd.
Markets
Despite the global economic slowdown which has seen consumer spending contract, the European Union (EU) the main destination of Uganda coffee, imported 163,353 coffee bags (74.0 per cent) in May up from 159,784 bags imported in April.
In March EU imported 207,824 bags and in February 238,460 bags.
Sudan is the second biggest importer of Uganda's coffee with 37,792 bags up from 32,197 bags imported in April.
Farmers and farmer groups have continued to demand for clean planting materials and seed to raise their own seedlings for the subsequent planting season to benefit from the good farm gate prices. In her maiden budget speech, Finance Minister Hajjat Syda Bbumba promised to focus on the development of the agricultural sector.
"Multiplication of 20 million disease resistant coffee seedlings for distribution to farmers will be undertaken," she promised.
However, the continued depreciation of the shilling against the US Dollar which has put agro-inputs out of reach for most farmers still remains a challenge that farmers have to overcome.
UCDA's outlook for the month of June are projected to reach 270,000 bags (16,200 tonnes) as coffee harvesting and marketing of the main season south of the equator intensifies.
Meanwhile, farmers are advised to take advantage of the ongoing rains to plant coffee under the replanting programme; and to improve on their husbandry practices for better returns.
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