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During this Coffee Year (CY) 2010/11, the coffee sub sector is projected to perform relatively better. Total exports are projected to be 3 Million - 60 kg bags, valued at US$ 288Million. This translates into an increase of 8.8% and 8% in terms of volume and value respectively compared to the same period last year 2009/10. Despite this projected performance, the subsector is still faced with a lot of challenges which include insufficient funding for coffee research, low use and limited access to agricultural inputs by smallholder coffee farmers, inefficient extension services, incidence of Coffee Wilt Disease (CWD) in Robusta to mention but a few. On another sad note, more than 80 people died during mud slides in Mount Elgon region which was a huge disruption to thousands of coffee farmers leading to a large acreage of coffee lost.

Similarly, the climate has, in general, not been too favourable for coffee farmers with drought taking its toll on production. Later on heavy rains and reduced luminosity did not help the south and western areas. Coffee leaf rust and Coffee Berry Disease developed in Mount Elgon adding more woes to the farmers in this region and reducing a potentially bumper crop by a significant percentage.

On the positive side there are many significant improvements in the Ugandan coffee industry. During this coffee year, Robusta FAQ prices moved from around UGX 2,000/KILO to 3,000. Washed arabica parchment values have more or less doubled during the course of the past year. Coffee quality in general has seen significant improvements with better retentions assisted in part by improvement in agricultural practices. Some of the washed arabica produced was of excellent quality and gained better and better acceptance rates globally and therefore achieved much better prices on the world market. 

The Uganda Shilling has traded out from 1800 to 2250 area against the dollar ensuring that more shillings went into the farmers’ pockets. Bank of Uganda once again demonstrated great strengths in terms of economic management during what had been a calamitous global scenario on the financial front. Interest rates led by much weaker Uganda T-Bill rates have become more affordable locally - both in terms of US DOLLAR credits and UGANDA SHILLING facilities.
Communications became cheaper, ever in real terms. It is now cheaper for Uganda traders to call their buyers in Europe on a mobile telephone from Uganda than vice versa.

Transit logistics remained excellent to FOB Mombasa. And there were real developments on the Dar route with the re-surfacing of the Mutukula – Dar Es Salaam road way. The security of transit goods was also at an elevated level with very little theft reported during the past and the current year.

There was significant growth in the local roasting industry and the variety of processed coffee on sale in the shops in Kampala is a testament to this small but rapidly growing segment. Roast and ground and repackaged Uganda origin soluble coffees were seen in the regional and even international markets. UCTF and the coffee fraternity salute the entrepreneurs who have put so much energy into this segment and we wish the trend to continue. We should not forget that Brazil processes a quarter or even a third of its total production internally. But it does not neglect its green export business and it invests vast amounts of capital and human resources into optimizing productivity ensuring adequate supplies for both the domestic market and the far bigger global market.

During the coffee year, it was observed that Public – Private partnership within the industry continued to improve which helps in stimulating the Ugandan coffee sector in the right direction.

On balance the positives make up for quite a few of the negative factors in the coffee industry.  In talking to people right across the industry I believed it was fair to say that one of, if not the major concern, was productivity and yield and whilst huge steps have been taken – there was clearly a lot of work to be done. There were many interesting initiatives and to some extent the combined impact of these was gradually being seen. But are we as an industry doing enough to safeguard the supply of coffee?

This really is, I think, the key concern for all of us in this industry.

Contrary to negativity about the coffee trade in general – something we have lived with for a while - my opinion was that, by and large, things were in good shape. We see investment in the industry at all levels. We have new entrants, new factories and washing stations being built and many other positive factors. Ugandan companies exhibit large degree of professionalism, innovation and decent management. There is always more to do but I firmly believe that the house in general was in order.

Now we are in this situation; we need to ensure that productivity is rapidly enhanced - as without supply – everything else we do will be in vain.

Turning briefly to the global outlook there seemed to be rays of sunshine emerging in terms of green coffee values. Consumption had not collapsed as a result of the severe economic downturn. There was a steady growth in mature markets with all kinds of innovative success stories such as coffee delivery system like pads and pods. We saw major investments in roasting capacities especially for soluble coffees. More South East Asians were developing into new coffee drinkers and these economies were becoming excellent in growth for the moment.

The East African market, in general, terms seemed triggered for ongoing growth. The old concept of coffee being a commodity consumed in the industrial North and produced by the developing South of the world has been knocked on its head since some time as traditional trading routes are reconfigured.

Land values are accelerating in many producing countries and the competition for suitable coffee growing or agricultural acreages is strong. The threat of climate change is constantly aired in the media.

All of these factors are gradually turning the tide in favour of producers.

The Ugandan coffee industry and all the many players in the sector need to ensure that Uganda is positioned to take advantage of all of the likely positive future developments surrounding our favourite product.

In conclusion I wish to say that as the coffee industry in Uganda we need to take advantage of the positives so that we can sustain them and address the challenges.

David Barry
PRESIDENT - UCTF

COFFEE EXPORTERS

• ARMAJARO UGANDA LIMITED
• Great Lakes Coffee Company Ltd
• Ibero (U) Ltd
• Job Coffee Ltd Kampala
• Domestic Stores. Ltd
• Kawacom Uganda Ltd
• Kaweri Coffee Plantations
• Kyagalanyi Coffee Plantations
• Olam (U) Ltd
• Savannah Commodities Ltd
• Ugacof Ltd UNEX Ltd
• Wabulungu Multi-Purpose Coop

ALLIED MEMBERS

• Africa Coffee Academy
• Audit Control & Expertise Ltd
• Bank Of Africa CAAP (U) Ltd
• Icona Café Interfreight (U) Ltd
• Kenfreight (U) Ltd
• Ld Commodities Ltd
• NK Logistics (U) Ltd
• Orient Bank Ltd
• Seafast Holdings (U) Ltd
• Spedag (U) Ltd
• Stanbic Bank Ltd
• Transami (U) Ltd
• Uganda Coffee Roasters Assoc.
• Safi (U) Ltd.