Revenue from Rwanda's coffee exports increased by 34 per cent to more than $105 million (about Rwf114 billion) in 2022, from more than $78.3 million (about Rwf85 billion) in 2021, according to the National Agricultural Export Development Board (NAEB)'s December 2022 report.
With this performance, the country has already surpassed the target to generate $95 million from coffee exports annually by 2024.
Yet, as per the report, there was a slight increase of two per cent in the quantity of coffee the country exported, from 17,479 tonnes in 2021 to 17,848 tonnes in 2022.
It indicated that the growth in revenue mainly resulted from good coffee prices which averaged $5.58 a kilo in 2022, or a rise of 31.2 per cent from $4.48 a kilo in the previous year.
The increase in coffee prices at the international market was also felt locally, with farmers earning more from their produce as a result.
Claudine Uwineza, a coffee farmer from Nyamasheke District, Western Province, told The New Times that farmers sold a kilo of coffee cherries at a record high price in 2022.
On February 11, 2022, NAEB announced that quality coffee cherries had to be bought from farmers at a minimum price Rwf410 a kilo, an increase of 65 per cent from Rwf248 a kilo in the previous year.
But, Uwineza said such a price was by far exceeded --farmers sold their produce at almost double that -- as coffee factories scrambled to get the produce from farmers.
Even though there was a reduction in coffee production in 2022, resulting from factors including bad weather conditions like stormy rains in the western part of Rwanda, Uwineza said high prices enabled farmers to register profit.
"In 2022, there was reduced coffee production, but income earned by the farmer increased. In 2021, coffee price did not exceed Rwf450 a kilo, while it reached up to Rwf800 a kilo in 2022. This is the first time we have gotten such an amount for coffee sales," she said.
"I harvested like three tonnes and sold it between Rwf350 and Rwf450 a kilo in 2022. Though that produce decreased to two tonnes in 2022, I sold them at Rwf800 a kilo, which means I still got more income," she said.
She said if the registered prices do not go down, farmers will be motivated to grow more coffee for increased production and revenue.
Speaking to The New Times, Siméon Ngendahayo, Managing Director of West Hills Coffee, a local coffee exporting company, said prices at international markets went up because of two major factors.
They include the reduced coffee production from major global producers and exporters, mainly Brazil, and the increased coffee demand after the Covid-19 pandemic subsided.
In 2022, Brazil suffered unfavourable climate conditions including frost and drought, leading to smaller yields.
"Coffee consumption after Covid-19 eased, exceeded our expectations. People drank it so much that there was a stock-out," Ngendahayo said, adding prices went high for the benefit of the (coffee) sector. "Now, both coffee farmers and factories are happy," he said.
Making Rwanda's coffee competitive through quality
Jules Ngango, an agricultural economist, told The New Times as long as one's products have not yet become popular brands on the international market, they become more of price takers, instead of price negotiators.
This situation, he indicated, happens when a country is small (in terms of production) such that it is unable to have price negotiation powers.
Ngango said Rwanda cannot compete with the largest coffee producers like Brazil and Columbia at the global level, and Ethiopia at the continental level, in terms of quantity, but it can compete with them in terms of quality.
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For him, there should be a situation where buyers, especially Americans who are major coffee lovers, first buy Rwandan coffee before other brands.
"And we can only achieve that through highly enhancing quality. We should set the highest quality because in terms of quantity, there are countries we cannot compete with because of the size of our land," he said.
"Rwanda's coffee is appreciated. If we maintain that, it can always fetch good prices, which can lead to increase in foreign revenue," he observed.
Information from NEAB indicates that the biggest markets for Rwandan coffee are Switzerland, the United Kingdom, the United States of America, South Africa, Nigeria, China, Germany and South Korea.
