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Exports of coffee from Uganda could rise as much as 3% this year as crop outputs increase, thanks to more rain in regions where the bean is grown.
By Russell Padmore | Business reporter, BBC World Service
Uganda, the biggest exporter of coffee in Africa, could see exports rise to 3.6 million 60-kg bags for the season.
The National Union of Coffee Agribusinesses and Farm Enterprises, NUCAFE, predicts farmers will benefit from good prices for the commodity.
Uganda predominately cultivates the robusta variety of coffee.
NUCAFE’s head of marketing and production, David Muwonge, admits there are concerns about how crops may have been affected by a prolonged dry spell between January and March, but says it will probably not affect overall output.
“I am expecting the above normal rains we’re getting now should really yield a strong harvest,” he said.
Bean counting
Two months ago, the state owned Uganda Coffee Development Authority reported eastern Uganda was experiencing heavy rainfall in all coffee-growing districts.
The UCDA report, issued in July, said the rains were supporting good bean formation and development.
Coffee farmers in eastern and central Uganda, who account for about 55% of the country’s annual production of beans, are expected to harvest the commodity later this year.
The Ugandan government has been encouraging the industry to grow more coffee to boost export earnings.
Nebert Rugadya, an economic commentator in Kampala, told the BBC: “Two decades ago, the coffee sector was fully liberalised, replacing the state-run Coffee Marketing Board with private coffee buyers, processors and exporters.”
The Agriculture Ministry launched a 20-year campaign in 1994 to plant 200 million trees by 2015. To date, they say, they have planted at least 150 million trees.
“This should increase production from 3.5 million to 4.5 million bags annually,” Mr Rugadya said.
Mr Rugadya also noted that until about 10 years ago, coffee was Uganda’s major export earner, before being overtaken by diaspora remittances and now tourism.
“However, it still remains a top export industry, worth about $450m (£277m), with 1.5 million households involved in coffee growing,” he said.
Climate woes
Scientists are engineering a new drought-resistant coffee plant that will help farmers in Uganda boost their annual crop output.
Lengthy dry spells, attributed to climate change, are having serious effects on farmers’ livelihoods and researchers are developing drought-tolerant crops to help them cope.
“When you talk about lifting the rural farmers out of poverty, you have to also start thinking about the kind of crops that they produce,” says Dr Ademola Braimoh, senior natural resources manager at the World Bank.
“We promote the cultivation of high-value crops on the part of the farmers,”
Commodity markets
The price that coffee growers in Uganda and elsewhere in the world get for their crop is guided by traders in the commodity markets.
In neighbouring Kenya, the chief executive of the Nairobi Coffee Exchange, Daniel Mbithi, recognises how markets in London or New York decide prices.
“We depend on the buyers from out there and therefore the moment the prices dip, then we will be bound to suffer the same, we will see our prices going down,” he said.”
A rally in coffee prices of recent months has fizzled out, as fears of drought in Brazil have eased.
However, the price of robusta, the type of bean grown in Uganda, has been on a steady climb and last week in London the contract for November rose $10, or 0.5% to $1,998 a tonne