Coffee prices may rise -UCDA

By Daniel Edyegu

There is still hope for Arabica coffee farmers in Bugisu and Sebei sub-regions. Though prices of parchment have faced a severe drop to sh3,000 per kg from sh5,000.

The Uganda Coffee Development Authority (UCDA) projects that prices will rise again towards the end of the year as the western nations recover from the Eurozone crisis.

“The price of Arabica coffee premium parchment will not increase to sh12,000 per kg as was the case in 2011. But we expect a gradual rise to sh5,000 onwards. This is likely to occur from November to December. The Eurozone crisis has greatly affected coffee exports,” Fred Ruzinda, the UCDA finance officer explained recently.

The ongoing Eurozone crisis which started in 2009, has affected 17 member states which comprise the Euro area. The crisis has had a spillover effect in Africa as imports from Africa to the West dropped.

However, according to reports from the European Commission, citizens are optimistic about the overall state of the economy and their personal finance situation is likely to support a slight increase in spending and help Eurozone member states emerge from economic recession.

“The Euro zone crisis affected the consumption of our coffee, which led to a drop in prices. But the market will rebound. The bigger challenge we have as a country is that much of the coffee that is produced locally is exported. Only 5% of the coffee produced is consumed locally. If we had high local consumption, the fluctuation of coffee prices at the international market would not affect us much,” Ruzinda said.

With the prevailing drought, UCDA expects coffee exports for July to fall by 3% to 300,000–60kg bags compared with the same period in 2012. The drought and falling coffee prices has dealt a blow to the coffee farmers and created fears among purchasing firms that farmers are likely to neglect appropriate measures to ensure quality of parchment.

Geoffrey Mwonge, an administrator with Kyagalanyi Coffee, a local coffee export firm said farmers need to ensure they produce quality parchment to fetch better prices.

“In coffee trade, there are specialised markets. These are buyers who will pay a price above the market price so long as the coffee meets the recommended quality. Coffee prices fluctuate from time to time. But what will keep our product on the international market is quality,” Mwonge said.