Coffee producers seek to eliminate middlemen

Wednesday March 6 2019

Coffee remains a key export in

Coffee remains a key export in Uganda. FILE PHOTO  

By ISMAIL MUSA LADU

Kampala- Coffee processors want to stop selling their coffee through auction markets such as Mombasa, saying they want to start dealing directly with buyers.

Uganda sells a number of its cash crops such as tea and coffee, among others, through Mombasa.
However, industry players yesterday argued they want to directly deal with buyers instead of middlemen.
Speaking to officials from Trade Mark East Africa at Uganda Coffee Development Authority offices in Lugogo yesterday, Mr John Nuwagaba, the Ankole Producers Cooperative Union general manager, said dealing directly with the market is far better than selling through the auction market.

“We have to sell in Europe directly so that we can earn a premium price,” Mr Nuwagaba told officials from Trade Mark East Africa who were visiting UCDA to understand how the coffee sub sector is benefiting from the Uganda Electronic Single Window whose objective is to hasten exports as well as imports.

Mr Joseph Nkandu, the National Union of Coffee Agribusiness and Farm Enterprises (Nucafe) executive director, said on the sideline of the meeting that selling through the auction market does not guarantee better prices for farmers.

“It is the companies that tend to benefit from such arrangement and not farmers. Dealing directly with buyers guarantees between 30 and 50 per cent more profit than you would get through auctioning,” he said.

According to the Central Bank, Uganda exported 4.1 million (60kg) bags of coffee for the year ended 2018, fetching more than $436m (Shs1.5 trillion). However, this was a reduction from the 4.7m kilogramme bags which fetched $555m (Shs2 trillion) in 2017.
Uganda has an ambitious target to produce 20 million kilogramme bags at least by 2015.

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This, according to Mr Frank Matsaert, the Trademark East Africa chief executive officer whose organisation the single window initiative is funded, puts Uganda in a competitive position with other global coffee producers.

The Electronic Single Window, seeks to achieve quick clearance of exports such as coffee, which has since its introduction helped to achieve accuracy in capturing data in the coffee export sector.

iladu@ug.nationmedia.com

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