Daily Coffee Report 8/10/26
Daily coffee report
StoneX Coffee Team
- Coffee
Despite Uganda’s Decision to Withdraw from the International Coffee Agreement, Their Future Looks Bright
By: Alexis Rubinstein, Managing Editor - Coffee Network
Despite Uganda’s Decision to Withdraw from the International Coffee Agreement, Their Future Looks Bright
CoffeeNetwork (New York) - On 10 September 2021, the Government of Uganda notified the Depository of the ICA 2007 of its intention not to join the extension of the International Coffee Agreement 2007. The extension of the ICA came into effect on 2 February 2022 and will be in effect until 1 February 2024 to give more time for negotiation of a new agreement.
Uganda has raised key issues that the agreement has not addressed including the following:
i. Barriers to trade imposed through high tariffs on processed coffee by developed/importing countries which disadvantage producer countries like Uganda resulting in farmers getting low prices.
ii. Promotion of value addition: Uganda needs unconditional market access that allows for export of value-added coffee not only green coffee. The ICA should have increased focus on value addition with protracted programs that aim at transferring value to the farm gate prices.
iii. Coffee price volatility which threatens the incomes of farmers and the sustainability of the coffee sector. There is urgent need to address and solve the structural weaknesses of the coffee sector and to ensure its sustainable growth and prosperity for farmers and all stakeholders.
iv. The lopsided classification of coffee by ICO which only lists Brazilian and Colombian types of coffee and refers to the rest under the category ‘others’.
v. ICO indicator prices which are used by coffee buyers as a benchmark yet their computation may not have sound statistical basis, thereby disadvantaging especially Robusta coffee producers.
vi. ICO not focusing on programs that could benefit coffee producing countries but spending over 70% of funds contributed by members on staff emoluments and administrative costs which is increasingly making ICO less valuable to its members.
vii. Projects to address challenges in coffee producing countries: Since 2012, when the Common Fund for Commodities stopped funding ICO member countries’ projects, member countries have requested for an alternative to aid them to address challenges such as climate change, low production and productivity, pests and diseases and price volatility.
Uganda, which is the leading coffee exporter in Africa and the seventh leading exporter in the world, joined the ICA 2007 in 2009 with a view of enhancing its interests. The Government of Uganda will continue to engage with the International Coffee Organisation (ICO) to negotiate better terms.
It is important to note is that the negotiations will have no effect on coffee trade as ICO does not market coffee.
Furthermore, following the expiry of the extension, Uganda like any other coffee producer, will ratify the new agreement once her interests have been catered for.
In an exclusive Q&A interview, Dr. Emmanuel Iyamulemye, the Managing Director of Uganda Coffee Development Authority (UCDA) responded to a wide range of issues concerning the coffee sub-sector and revealed plans to make Uganda coffee more competitive and profitable.
“When I joined UCDA in 2016, there was a target of increasing coffee production to 20 million 60kg bags by 2025,” he said. “I can report that we have seen coffee production increase from 4.2 million 60kg bags in FY 2015/16 to 8.06 million bags in FY 2020/21 while coffee exports have increased from 3.6 million 60kg bags in FY 2015/16 to 6.1 million 60kg bags in FY 2020/21.”
The coffee production and export figures recorded in FY 2020/21 were the highest ever.
This is mainly attributed to the planting of new coffee trees. Cumulatively, 1.167bn coffee seedlings were generated and distributed between FY 2015/16 and FY 2020/21.
UCDA is working with National Coffee Research Institute (NaCORI) to develop high-yielding and wilt-resistant coffee varieties.
To date, 10 varieties (KR1-10) have been developed and more are in the pipeline. We now have new Arabica varieties as well that are drought tolerant and high yielding.
Over the past five years, the UCDA has been sensitizing the public on the profitability of coffee as a business. For example, with a one hectare farm (approximately 2.5 acres of coffee), one can make a minimum of Shs20m annually which would change the fortunes of a household.
They are now running a campaign on the rehabilitation of old coffee trees to increase production and productivity. To encourage farmers to stump their coffee trees, we have given them fertilizers but this is a one-off intervention to demonstrate how stumped coffee trees can be productive.
The UCDA also continues to promote Uganda coffee in new markets. They set up a coffee promotion office in Guangzhou, China in 2016 and since that time, have developed a coffee promotion strategy specifically for China. In addition, they partnered with the British High Commission to help Uganda Coffee enter the UK market.
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