Italy top destination for Uganda’s exports
Uganda’s total exports to the European Union (EU) totalled $505m. Italy contributed 32% of this amount to our national c ...
By Daniel Karibwije
The year 2020 was a dark year for business, but not for some exporters. The European Union is a lucrative market of 450 million people. Any business person’s dream is to have a share of such a pie. According to Bank of Uganda external sector statistics 2020, Italy was the top destination for Uganda’s exports, fetching $166m in export revenue.
Uganda’s total exports to the European Union (EU) totalled $505m. Italy contributed 32% of this amount to our national coffers. The country’s exports to the United Kingdom (UK) was $11m. The UK has since left the EU trade bloc and Uganda might have to negotiate a bilateral trade agreement with her former colonial-master now-turned development partner. Kenya signed an economic partnership agreement with UK in December 2020.
Compared to other trade blocs, the EU figures might appear overshadowed. The market has high growth potential and unexploited opportunities. Uganda earned $1.9b from the Middle East. The Common Market for Eastern and Southern Africa (COMESA) raked in $1.3b. This means exports to the EU make up less than half the exports to COMESA and the Middle East. The EU is Uganda’s third ranking export trade bloc destination.
Back to Europe, other countries from which Uganda earned foreign exchange are; Germany ($94m), the Netherlands ($72m), Belgium ($68m), Spain ($43m) and France ($14.5m). So, what exactly has Uganda sold to Italy, should be our next question.
According to the International Trade Centre (ITC) statistics, the major products exported were coffee ($123m), cocoa ($5.2m), fish fillet ($3m), hides and skins ($2m) and tobacco ($1.3m).
Uganda’s main commodities sold to Germany comprised of coffee ($75m), sesame and other oil seeds ($5.3m); and mineral fuels and oils ($4.7m). Netherlands remains the biggest destination for Uganda’s cut flowers and roses with $47m exported. Other products sourced from Uganda include mineral fuels and oils ($8.7m), fish fillet ($7.5m), cocoa ($6m), coffee ($3.2m) and oil seeds ($2.7m).
For the rest of Europe outside the EU, Uganda earned $35m in exports to Turkey ($20.4m), Switzerland ($10.5m) and Bulgaria $1.3m. The main product sold to Turkey were mineral oils & fuels ($11m) while to Switzerland it was animal, vegetable fats and oils ($6m).
These figures reveal that coffee has a bright future in the EU market. Increased production and improved quality will open market opportunities. Even in the midst of the COVID-19 pandemic, coffee maintained steady progress.
Prices fluctuated because Italians shifted coffee drinking from the cafes, coffee shops and offices to their homes. Whereas Italians drink coffee in private and public, the bee hive of activity associated with coffee shops, cafés and restaurants, which closed during the peak of the pandemic took a toll on demand and prices. Italy is getting back on its feet after being one of the worst hit countries by the pandemic.
The Mediterranean nation has administered over 38 million vaccine doses, with over 13 million people (24%) of the population fully immunised, according to official statistics. The vaccination campaign set a new national record recently, with 1.2 million doses administered in 48 hours.
With businesses normalising in Italy, this should be music to the ears of Uganda’s coffee sector. Italy and Germany have strong coffee cultures. The high vaccination rates in Europe are re-opening the social scene. This will increase coffee export volumes, prices and earnings. Coffee shops, restaurants and vending machines are resurrecting after back-to-back lockdown nightmares.
Every dark cloud has a silver lining, and this is the time for Uganda’s coffee to gain momentum and accelerate in the lucrative EU market.
The writer is an export trade specialist