16 November 2011

Uganda: Coffee Prices Gain As Harvest Peaks

The price of Arabica coffee in the Elgon zone is anticipated to increase as the harvest season, which delayed for a month, draws to the peak.

Mr Wilson Chemusto, the Chairperson of Kapchorwa Commercial Farmers Association, says they are hoping that a rise in demand for coffee in the region will trigger a slight increase in prices.

"We have had excessive rainfall that affected the yields. We are currently harvesting, but we predict to have a low output," Mr Chemusto said.

He added, "Relatively low production means prices will have to increase. In fact, prices have started moving up and we anticipate doubling at a certain stage."

Currently, the price of premium parchment goes for Shs9, 000 per kilogramme, while ordinary parchment is trading at Shs8, 000 per kilogram.

Red cherries are trading at Shs2, 100 to Shs2, 300 per kilogram. However, due to persisting rain, most farmers prefer to sell red cherries to avoid taking long while drying beans.

"The prices are now better compared to last year's, which dropped below Shs8, 000 for premium parchment," Mr Chemusto explains.

He said, initially -at the beginning of the harvesting season- prices had dropped about 10 per cent. Meanwhile, the decline in production has kicked off big purchases among coffee firms and middlemen.

Both local and export coffee firms have upped purchase to increase the stocks that had been affected by the delayed season.

But, there is fear that low crop productivity will affect Uganda's targeted volumes of exports for next year.

According to officials at the Uganda Coffee Development Authority, the country expects its coffee exports in 2011/12 (Oct-Sept) to edge up to about 3 million 60-kg bags from an estimated 2.8 million bags this year.

"We think we'll export about 3 million," a source at the UCDA recently told Daily Monitor.

The projection was made basing on the extended period of copious rains which are good for coffee flowering and bean formation.

Meanwhile, Uganda's coffee exports have been increasing over time and in the month of September alone; the country exported 340,378 bags of coffee weighing 60-kg each, up from 169,728 bags in the same month last year.

The rise was due to good rains and to exporters who were clearing warehouses of old stock to make room for the new crop.

"Normally, when farmers and exporters are clearing their warehouses of old stocks to create room for a new crop, the process creates a huge jump in exports," a source at UCDA said.

South and southwestern Uganda account for 45 per cent of Uganda's annual coffee production while central and the eastern parts of the country account for the rest.

Uganda, which mainly cultivates robusta, is Africa's leading exporter of the beans and coffee earnings are a major source of foreign exchange.

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