The Independent Uganda: You get the Truth we Pay the Price
Latest data from the International Coffee Organisation (ICO) shows that coffee prices have been rising since October last year stemming from low supply on the international market.
As at the beginning of February this year, the most pronounced price increase was for the Robusta, which rose by 6.4% to US$2.16 per kg, the highest monthly level since September 2011.
An initial estimate of global coffee production in 2016/17 season suggests that the world total will remain relatively stable, up 0.1% to 151.6 million bags.
Arabica production is potentially set for a record level of 93.5 million bags with bumper crops expected from Brazil, Colombia and Honduras but prospects for Robusta supply are less positive, with lower crops expected from most major origins.
“Prices on the futures markets have reflected these developments recently, with Robusta prices generally showing support and Arabica under pressure, leading to a narrowing in the arbitrage between the two,” ICO notes in its December 2016 market report.
Elsewhere in the region, Tanzania and Kenya are expecting a drop in export volumes, with the former expecting a sharp decline of up to 22% to 800,000 million bags this year compared with the last season.
Kenya, which earned US$218million from the export of 783,000 bags in the 2015/16, up from US$208million from the export of 750,000 bags of coffee in the previous season, is projecting a drop in the export volumes by between 50,000 and 67,000 bags.
“With the conditions as they are, we expect coffee production to decline,” Harrison Mugo, a director at Coffee Research Institute told Bloomberg.
On the other hand, Rwanda’s Agriculture Export Authority is projecting high coffee earnings for the new fiscal year, despite productivity obstacles that have hindered production.
The National Agriculture Export Board has set an ambitious target of $70 million for 2017/18 season, up from $60million in 2013/14 season.
Niyibigira said the country is targeting to export at least 10.5 million bags valued at US$ 1.84billion by 2020. But low productivity, unpredictable weather conditions, inadequate agricultural extension officers, and low use of fertiliser remain big hindrances to productivity.
In response Niyibigira said the government plans to distribute 900 million more seedlings, 79,800 metric tonnes of fertilisers, 133,752 litres of herbicides, and 66,876 liters of pesticides to farmers.
He said UCDA is also strengthening the coffee extension systems so that farmers can be helped on good farming practices.
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editor@independent.co.ug
