Uganda’s coffee industry eyes new markets, value addition

Uganda’s coffee industry eyes new markets, value addition

 

But the country still has a lot of coffee that is still being dried on the ground

Kampala, Uganda | ISAAC KHISA | Uganda’s coffee industry will seek new international market for their products to reduce over concentration on traditional buyers to boost farmer’s income.

Coffee is the country’s second biggest source of foreign exchange after tourism and provides a living for around 8 million people or about 19% of the population.

“In 2017, stakeholders in the coffee industry discussed the coffee road map on how to accelerate production but also increase income to the farmers,” said Emmanuel Niyibigira, managing director of the regulator, Uganda Coffee Development Authority.

“They were concerned that we need to have value addition for our coffee but also have the demand. We are looking at some markets such as China which has 1.4billion people and it is an emerging market. We are also looking at Middle East, Maghreb region, Eastern Europe though now we have this conflict (between Russia and Urkaine) and also the Balkan states.”

Uganda exports most of its coffee to Italy, Germany, Algeria, India and Sudan.

Niyibigira, who was speaking during the Agribusiness Mkutano 2022 at Mestil Hotel in Kampala on April.28, said the regulator is looking forward to supporting   local coffee businesses for value addition including soluble coffee processing plants.

He said the government aims to ensure that the country has at least two soluble coffee plants in the next five years. He said UCDA and the Uganda Development Corporation, a government investment arm, are carrying out a feasibility study to ascertain its viability.

The country has 38 registered coffee roasters although the government’s plan to have a soluble coffee plant has been on the table since 1994.

“We are also looking at branding our coffee. Most of our coffee is being exported and blended with other coffees due to its good aroma. We need to be recognized as an origin of Ugandan coffee,” Niyibigira said, adding that it is unacceptable that countries including  India, Vietnam and others in Latin America, which also produce huge volumes of coffee, import Ugandan coffee beans especially Robusta  only to blend with their coffees to boost  aroma and  fetch premium prices on the international market.

Niyibigira, however, noted that the industry still faces some challenges.

“We still have a lot of coffee that is still being dried on the ground,” he said, adding that low bean sizes, low productivity as well as pests and diseases are being addressed with new coffee varieties.

Tony Mugoya, the executive director at the Uganda Coffee Farmers Alliance said as the country pursues value addition in the coffee industry, farmers should be able to sale their products to the highest bidder.

“Uganda is a free market economy and us as farmers, we shall give our coffee to anyone who offers the highest price. That is all we want,” he said. “So the more the people or companies in the market, the more competition and the better for us.”

The government has in past weeks faced opposition over its move to exclusively grant Enrica Pinetti-owned Uganda Vinci Coffee Company to purchase and export the country’s coffee.

Mugoya said as the country embrace value addition, they should be aware of the existing tariff and non-tariff barriers in the international market.

Joseph Nkandu, the executive director of the National Union of Coffee Agribusiness and Farm Enterprises (Nucafe) said value addition in coffee need to be in the entire value chain.

“Farmers need to own the value addition component beyond the farm level as it enhances their income,” he said.

Nkandu said countries such as Uganda striving to embrace value addition need to enter into partnerships in targeted markets so that the product is easily accepted.

Martha Wandera, managing director at Kimco Coffee Ltd said the government should probably consider setting up a production plant for production of packaging materials for processed coffee to lower coffee prices  stimulate local demand.

She said also suggests that the costs of accessing quality mark be reduced to encourage coffee producers to access the services.

Uganda’s coffee export volumes and earnings has consistently grown over the past 20 years and accounts for 7% of the world’s production.

Last year, farmers exported 6.49million 60 kg bags of coffee worth US$629.8million compared to 5.36million 60kg bags in the 2019/2020 season worth US$512.22million in the previous year.

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