Uganda: 'Local Coffee Market Is Key'

15 October 2019

A slump in global coffee prices in 2018 was a cause for worry for most coffee producers across the country.

High production from global coffee giants saw a bumper crop harvest with Brazil producing more 60 million bags.

The 2018/19 season was approximately over 170 million bags on the global market which is 10 million more than consumption. The slump in prices saw coffee coffee cut back on inputs, pesticides and other farm-related expenses.

With four million bags produced each year, Uganda is the second coffee producing country in Africa behind coffee giant Ethiopia, making coffee the second foreign exchange earner after tourism.

According to Fred Luzinda, the Uganda Coffee Federation president, a total of 4.6 million 60kg bags were exported generating $ 492 million in the year 2018. The average weighted unit export price per kilo stood at $1.84 per kilo in 2018 from $1.95 in 2017. This negatively affected exporters.

Borrowing a leaf from Ethiopia and Brazil where half of the coffee produced is consumed domestically, coffee producers are plotting a multi-pronged approach in promoting domestic consumption and production.

Boosting domestic consumption is viewed by coffee industry experts as one of the key strategies that can absorb global coffee price shocks.

Elizabeth Nsimadala, the President of Eastern Africa Coffee Federation, says coffee beverage is not yet that popular in the East African region.

"Raising local consumption will be one other way of cushioning farmers from low international prices,"Nsimadala said recently at the International Coffee Day Celebrations at the Ankole Coffee Producers Cooperative Union Limited Sheema District.

She cites Ethiopia which consumes at least 20 per cent of their production.

"Cooperatives should partner under Uganda Coffee Federation, Uganda Cooperative Alliance and others to promote local consumption," she noted.

Emmanuel Ilyamulemye, the Uganda Coffee Development Authority executive director, says current domestic consumption for coffee stands at 5 percent and UCDA's target is 15 per cent. This, he says, is achievable with the growing hospitality industry.

Uganda has been selected as one of the beneficiaries in a project to promote domestic consumption of coffee under the International Coffee Organisation.

Coffee tourism

Coffee tourism is another key strategy in promoting domestic consumption though it remains at infancy stage. Coffee tourism involves linking coffee farmers to consumers under the farm-to-cup approach, with consumers touring farms and sharing their experiences with the farmers. The feedback from tourists will help farmers adopt good farming practices and boost production but also in turn attract more domestic consumption.

John Nuwagaba, the general manager at Ankole Coffee Producers Cooperative Union Limited in Sheema District, says coffee is still largely viewed as a cash crop, resulting into low domestic consumption.

Coffee should be packaged in small packets that are affordable. Coffee producers need to consume coffee in their homes and enhance quality management for Ugandans to appreciate coffee.

Eldard Muhangisa, a coffee farmer, says Ugandans were not groomed right to take coffee. "Coffee has been viewed for long as a drink for foreigners. People had no morale for drinking. It is a gradual process to consume coffee domestically," he observes.

coffee kiosks

In 2014, President Museveni tasked UCDA to increase coffee production from 3 million bags to 20 million bags. At the time, Iyamulemye says they were only looking at production but realised there was need to create demand by drinking our own coffee.

Currently, Iyamulemye says they trained youth as barristers and graders, quality controllers who will work with local cafés, restaurants and hotels.

"We shall start with simple coffee kiosks and simple coffee machines," he says.

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