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Uganda: Coffee Declines
UGANDA's coffee export earnings have significantly declined to the lowest level in ten years, according to a Parliamentary report on the current status of the economy.
The committee report on the national economy shows that between July and September, coffee export earnings were $42 million (about Shs72.9 billion) representing a decline of 7 per cent compared to the same period last year.
The Committee Chairperson Mr Ibrahim Kadunabbi (Butambala) attributed the decline to the Coffee Wilt Disease and the unfavourable weather conditions.
The report further shows that in terms of export volumes, there was a decline of 16 per cent compared to the same period last year. "Export volumes of 510,384 60 - Kg bags in the first quarter of 2006/07 were the lowest since 1997/98," the report reads in part.
Mr Kadunabbi said the average coffee export prices for the period July to September 2006 were at least $1.3 (about Shs2, 000) per kilogramme. But the committee report suggests that this is higher compared to the same period the previous year.
"The increase in unit price notwithstanding, the fall in export volume more than offset the benefits from the price rise which, resulted into a decline in the coffee export earnings," the report reads in part.
Mr Kadunabbi said the shortfall demonstrates the urgent need to deal with the supply side constraints in Uganda's coffee sub-sector.
According to the monthly report of the Uganda Coffee Development Authority (UCDA), Uganda's total coffee exports for the year 2005/06 dropped 20% to 2 million bags. Robusta declined almost 30%, from 2 million bags in 2004/05. Arabica exports, however, increased by 15% to 590,000 bags. During September, a total of 158,548 60 kg bags worth US$13.97 million were exported. "Coffee sales to European Union countries improved from 56% in August to 75% in September," said the report. "Nearly all of the coffee went to the EU, Sudan, Switzerland, Morocco and Japan."
Factors for the decline in robusta include: coffee wilt disease, which has destroyed nearly 50% of the old coffee bushes since 1993; reduced amount of growers due to low prices received by farmers in the past; increasing urbanization, especially in central and eastern regions, and persistent drought. The rise in arabica is attributed to recently planted arabica coming into production along with clement weather conditions in arabica growing regions.
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