Uganda’s coffee industry looking bleak

In a small store adjacent to her house, Ms Ruth Namuli, 45, is sorting and packing dry coffee beans into sisal bags with the help of her two sons. Ms Namuli, a resident of Mukono District, has been a coffee farmer for over 20 years, an income generating activity she learned from her deceased parents. “Coffee paid my school fees and that of my other siblings. It has been and still is the main income activity that brings food on my table,” Ms Namuli explains.

As she explains, a truck branches off into her compound; it’s the traders that Namuli has been waiting for; immediately they start to weigh the coffee bags and loading them onto the truck.

Ms Namuli negotiates the payment with a gentleman only identified as Haji Mukunya, he is offering Shs30,000 per 20 kilogramme sack of coffee. Ms Namuli says traders who used to buy coffee from her parents used to pay Shs4,500 and above for each kilogramme. Things have changed with the current picture currently indicating gloom in an industry that was once the country’s lead export earner.

The Uganda Coffee Development Authority June report indicates that the farm-gate prices ranged between Shs1, 800- 2,000 for each kilogramme of Robusta dry cherries commonly known as Kiboko and Fairly Average Quality (FAQ) was sold at Shs4, 500- 4,800 per kilogramme. While each kilogramme of Arabica parchment went for Shs8,000- 9,000.

According to Haji Mukunya, they currently negotiate for lowered prices from farmers because they incur higher costs compared to some years back. “Fuel is so expensive, the charges at the coffee mill have gone up because of power rationing. The mills which can afford generators, diesel to run them is too costly,” he explains.

Crossroads
Its nearly two-years since the Uganda Shilling started losing ground against the dollar, from a Shs1800/50 in early 2010 to the current Shs2600/50. To the developing export sector, one would think exporters and farmers are smiling their way to the banks. The scenario is, however, totally different. All that is earned is again reverted into the expensive inputs. “Farmers would be getting much more but the pump fuel prices, which are in the Shs3,900 range for petrol coupled with the too expensive and less dependable power because of increased load shedding has made life difficult,” Mr David Kiwanuka, the communications manager at Uganda Coffee Development Authority explains.

Dilemma
Experts say this phenomena is threatening the coffee production chain and if nothing is done, it might further impact on the production of the country’s once leading export earner. To make profit, Namuli says she has reduced the number of labourers she uses to weed and pick coffee beans because she can no longer afford paying them. This, she says, has significantly affected output.

It is uncertain and there is little hope for Uganda to attain the 3 million bag mark coffee production this year as experts in the industry have predicted. With the coffee month ending this month, volumes from the farmers are not that impressive. “Yes we have seen a slight increase in production but this is not sufficient and we are afraid this year again we might not hit the 3 million bag target,” a reliable source from the industry said. “We are anticipating a 2.8 million bag production this year which is way below our target.”

The last time the country produced three million bags was three-years ago and the trend has since been going down. Also, despite efforts to fight the wilt disease that affects Robusta; Arabica coffee production has been hit by the Leaf Rust disease. According to a report from UCDA, the disease has been responsible for a drop in Arabica production. This is due to the cyclic nature of the crop. Cumulatively, production of Arabica around this time last year was 502,377 bags and has since dropped to 450, 147 bags according to the May 2011 UCDA monthly report.

Effect of disease
This indicated a low output of 65 per cent as opposed to the normal 82 per cent in Arabica production. “Leaf Rust disease leaves the coffee tree with fewer or no leaves at all, minimising the ability of the plant to bear fruit to full maturity,” the report reads in part. However, there has since been an improvement with the recent rains.

On a year-to-year basis, for the 12 months ending July 31, 2011, total coffee exports amounted to 2.8 million bags worth $398 million: Robusta – 2 million bags and Arabica – 648 thousand bags, as opposed to 2.7 million bags – Robusta 2 million bags and Arabica 734 thousand bags recorded in a similar period last year.

As a way forward, Mr Othieno Odoi, the export promotions officer at Uganda Export Promotion Board (UEPB) says: “The transport and energy sectors have a triple effect on almost all sectors; government should urgently find solutions for these challenges.”

The farmers air out the same concerns. “Because the roads are impassable, hiring trucks is too costly these days. We do carry sacks of coffee on bicycles to the processing stations. This delays and affects the coffee quality,” says Peter Wambede a coffee farmer from Manafwa.