Uganda’s coffee industry targets new markets and added value

Kampala, Uganda – Uganda’s coffee industry will seek a new international market for its products to reduce excessive focus on traditional buyers to increase farmers’ incomes.

Coffee is the country’s second largest source of foreign currency after tourism and supports about 8 million people, or about 19% of the population.

“In 2017, coffee industry stakeholders discussed the coffee roadmap on how to accelerate production but also increase farmers’ incomes,” said Emmanuel Niyibigira, chief executive of the regulator. , the Uganda Coffee Development Authority.

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

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

Niyibigira, who was speaking at Agribusiness Mkutano 2022 at the Mestil Hotel in Kampala on April 28, said the regulator was happy to support local coffee businesses for value addition, including coffee processing factories. instant coffee.

He said the government aims to ensure that the country has at least two soluble coffee plants in the next five years. He said the UCDA and the Uganda Development Corporation, an investment arm of the government, were conducting a feasibility study to determine its viability.

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

“We are also considering branding our coffee. Most of our coffee is 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 he is unacceptable that countries like India, Vietnam and others in Latin America, which also produce huge volumes of coffee, import Ugandan coffee beans, especially Robusta, only to blend into their coffees to to stimulate the aroma and obtain high prices in the international market.

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

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

Tony Mugoya, executive director of the Uganda Coffee Farmers Alliance, said as the country seeks added value in the coffee industry, farmers should be able to sell their produce to the highest bidder.

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

In recent weeks, the government has faced opposition over its decision to exclusively award the Uganda Vinci Coffee Company, owned by Enrica Pinetti, the purchase and export of the country’s coffee.

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

Joseph Nkandu, executive director of the National Union of Coffee Agro-Industry and Agricultural Enterprises (Nucafe), said value addition in coffee needs to be integrated across the entire value chain.

“Farmers need to take ownership of the value addition component beyond the farm level because it improves their income,” he said.

Nkandu said countries like Uganda that are trying to embrace value addition need to partner in targeted markets so that the product is easily accepted.

Martha Wandera, managing director of Kimco Coffee Ltd, said the government should probably consider setting up a factory to produce packaging materials for processed coffee to bring down coffee prices and stimulate local demand.

She also suggested that the costs of accessing the quality label should be reduced to encourage coffee producers to access the services.

Ugandan coffee export volumes and earnings have steadily increased over the past 20 years and account for 7% of global production.

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