Drop in coffee prices affect sector returns

By Eronie Kamukama

Kampala. Uganda’s coffee investors are seeing a drop in returns as prices on the global market fall.
Mr Aloys Lorkeers, the European Union head of sustainable development, said prices have fallen in the last three weeks.
“From the coffee auction, the price of a kilogramme of coffee went down in a week from Shs2,300 to Shs1,500,” he said.
Mr Lorkeers made the remarks on the sidelines of a Uganda Coffee Development Authority (UCDA) stakeholder workshop in Kampala, which sought to develop a detailed implementation plan for the Coffee Road Map.
The road map seeks to grow Uganda’s production capacity from about three million to 20 million bags.
Mr Emmanuel Iyamulemye, the UCDA executive director, said at the moment, the biggest roasters are controlling the market.
However, he said, despite plummeting prices, there is renewed interest from the private sector to grow the cash crop.
Uganda exports much of its coffee to the European. Exports to the EU have increased from Shs586.5b (€ 134m) in 2007 to Shs1.36 trillion (€ 312m) in 2017.
Uganda’s total coffee output per year has remained at three million bags over the last five decades.
Economists had expected that liberalisation of the market would by now have grown coffee production.
However, according to former Finance minister Ezra Seruma, this has not been the case.
“We have attempted to have a roadmap to go to 20 million bags. It is important that many more businesses [get] involved in coffee farming. But importantly, those who are in coffee planting should have more output per tree. You find that we have only like half a kilogramme of green beans per tree annually,” he said.


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