Uganda coffee exports reach a new record high

The East African nation shipped 6.49million bags of coffee worth US$629.8million

Kampala, Uganda | ISAAC KHISA | Coronavirus pandemic restrictions in Vietnam coupled with bad weather in Brazil have helped Uganda record a 23% growth in coffee export earnings for the 2020/21 coffee season (October-September) to US$629.8million.

Latest data from the Uganda Coffee Development Authority (UCDA) shows that farmers exported 6.49million 60 kg bags of coffee for the 2020/21 season compared to 5.36million 60kg bags in the 2019/2020 season. The farmers earned US$512.22million in the previous year.

The drop in Vietnam’s exports as a result of COVID-19 restrictions and production slumps in other top producers boosted global coffee prices, with countries like Uganda and the rest of the East Africa reaping big in the process.

Vietnam is a major producer of Robusta, the bitter tasting bean used in instant coffee and some espresso blends. Benchmark Arabica coffee futures have jumped by around 45.8% this year, while Robusta futures have surged 52.2%, according to Refinitiv data.

Brazil, the world’s biggest producer of the premium arabica coffee beans, has seen its crops impacted by drought and frosts.

Bad weather also affected Colombia’s harvest, and the emergence of the coronavirus variant in the country could lead to prolonged restrictions and labor shortages that worsen production, Fitch Solutions said in a report last month as quoted by CNBC.

“At the same time, we think that demand, at least in Europe and the US, will pick up in the coming months as the lifting of Covid-19 restrictions should enable coffee shops to re-open,” it added.

The consultancy raised its 2021 forecast for the average price of arabica coffee from about $2.7 per kg to $3.2 per kg. It also revised upward its projection for 2022 from about $ 2.5 per kg to $3.0 per kg.

Italy maintained position as Uganda’s largest importer of coffee accounting for 27.75% market share as at the end of last month, followed by Germany 12.28%, Algeria 11.03 % India 10.09% and Sudan 9.50%.

Coffee exports to Africa amounted to 164,024 bags, a market share of 29% compared to 169,383bags (24%) the previous month. These included Algeria, Sudan, Morocco, Kenya, Egypt, and South Africa.

However, Europe remained the main destination for the country’s coffees with a 50% import share although lower than 61% in the previous month.

Uganda government through UCDA has since 2012 distributed millions of coffee seedlings to farmers across the 98 districts that grow the crop, though low productivity, unpredictable weather conditions, inadequate agricultural extension officers, and low use of fertilizers remains a big hindrance to productivity. The country is eying to export at least 20 million bags a year by 2030.

“We are seeing more professionals into coffee farming,” Tony Mugoya, executive director of lobby group Uganda Coffee Farmers Alliance told Bloomberg. “We are seeing more capital investment in the sector.”

Elsewhere in the East African region, Tanzania, Kenya and Rwanda, too, recorded a sharp increase in earnings from coffee exports.

Tanzania’s coffee export market recorded an eight-year high of both the value and quantity of the crop exported in the 2020/21 season citing a surge in prices on the international market.

Statistics from the Tanzania Coffee Board (TCB), shows that the country exported 70,388 tonnes of coffee, a rise from the previous season’s 59, 332 tonnes earning US$137million, an increase of 20% from US$112.85milion fetched in 2019/2020.

The last time the country recorded high coffee sales was in 2012/13 earning US$181.79 million from export of 71,007 tonnes.

“Covid-19 had its pros and cons and the good thing is that lockdown forced people to drink a lot of coffee thereby forcing prices to be favourable in the world market,” said Primus Kimaryo, the acting Director General at the Tanzania Coffee Board.

Kenyan coffee farmers saw their earnings increase by 9.5% to Ksh22.2billion despite an 11% decline in export volumes to 43,483 metric tonnes for 2020, according to the Kenya National Bureau of Statistics.

Rwanda, meanwhile, exported 16.8 million kilogrammes of coffee worth US$61.5 million for the I2020/2021 season citing increase in prices on the international market, according to the National Agricultural Export Development Board (NAEB).

Rwanda exported more than 19.7 million kilograms of coffee worth US$60.4milion in the previous year.

Globally, data from the International Coffee Organisation shows that coffee production for 2020/21 coffee year is estimated to increase by 0.4% to 169.64million bags, up from 168.98million bags in Coffee Year 2019/20.

Similarly, consumption is estimated to increase by 1.9% to 167.26million bags compared to 164.13million bags during the same period under review.

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