African traders eager to add value to coffee 

For Africa, coffee is as much a profitable commodity as it is a paradox. The largest producer on the continent is Ethiopia, but the main exporter is Uganda. 
Meanwhile, the greatest consumers of the continent’s cherry live in the West, the United States of America, while demand for the same is rising in Asia and the Middle East. 

As industry players gather in Kigali, Rwanda next week in their confirmed hundreds for the 19th African Fine Coffees Conference and Exhibition set to be held from February 15 to 17 at the Rwandan capital’s convention centre, the agenda as shown by the line-up of speakers is self-evident on what they intend to achieve.
There is Mr Suarin Nanavati who spent his career working in tropical agricultural supply chains and his Ethos Agriculture Organisation supports the next generation of leaders in coffee sustainability in East Africa. 

Another speaker, Mr Lars Khanert, is an advisor on digitalisation for the German development agency, GIZ’s Sustainable Agricultural Supply Chains. 
Elsewhere, Mr Sylvio Padilha is an international sales executive at Guarany, an Arabica coffee growing firm and Mr Kambale Kisumba Kamungelean, export director at TSOKAS in the Democratic Republic of the Congo (DRC) will also join up with Ms Erika Koss, an academic from St Mary’s University in Canada who is a specialty coffee expert.
It is a line-up that conspicuously signals intent towards a value-addition agenda for a continent that predominantly exports raw coffee.

Headwinds
Coffee production in Africa continues to be negatively impacted by poor social-economic development issues, according to Ms Maja Wallengren, a Danish analyst based in Mexico. 
Even with modest growth in output registered by countries like Ethiopia, Uganda and Tanzania in the last decade, higher costs as well as low use of fertiliser and bad weather are conniving to deny the continent productivity levels last seen in the 90s even as the world’s supply deficit keeps growing, the analyst says.

All of last year, Uganda, which is Africa’s largest coffee exporter, registered 12 consecutive monthly declines in exports, according to International Coffee Organisation (ICO) data. 
Cumulative exports from January to December amounted to 5.63 million bags compared to 6.77 million bags in 2021, a 20.25 percent decrease driven by drought, the industry lobby said in its latest report. 

This 1.14 million bags deficit could barely be offset by increases posted by Ivory Coast, Kenya and Tanzania with 69.4 percent to 0.19 million bags, 33.2 percent to 0.12 million bags and 18.6 percent to 0.34 million bags consecutively.
Concerns abound that African producers of the beans don’t earn their fair share in the global value chain, sparking sustained agitation for processing capacity to be established. 
Should the continent attain its processing plans, the rest of the world could see lesser bean supply—a trend already seen with the 8.5 percent drop in exports registered in December even as global consumption surged by 3.3 percent.

Value addition
The Kigali conference is one of three signature events in the coffee industry that include the Specialty Coffee Association of America and the World of Coffee. It comes after a three-year lull caused by the Covid-19 pandemic. Its prospects seem high for organisers and participants alike.

“For this conference, we have structured all the seminars and the presentations around the key issues that the coffee sector faces. The key issues we are focusing on, access to finance, enhancing productivity and processing technology, those are the key things that we are focusing on,” said Mr Kenneth Barigye, the Ugandan chair of the African Fine Coffees Association in a February 9 phone interview.
 “The challenges to value addition are mainly access to appropriate technology,”  he added.
He proceeded to note thus: “Our market for coffee is not in Uganda, is not Rwanda, Burundi, Ethiopia where we produce coffee from. Our market for processed coffee or coffee with value-addition is in countries that we need to transport [coffee] over water and that requires special technology that will preserve the quality for a longer period.” 

Mr Barigye as such reckons that the conference will afford participants “an opportunity to engage on how that can be achieved; how are other countries, especially a country like Columbia, how are they doing it that they can export processed coffee to Dubai, it gets there after several months and it’s still okay?” 
Africa exports about 11 million bags of coffee to Europe and the United States annually, just about the same amount in tonnage that returns to the continent as processed coffee for consumption in the region’s main markets of Algeria, Egypt, Tunisia and South Africa. 

European processors have always opposed efforts to have the beans processed in Africa, citing their market needs for freshly brewed coffee preferred by their consumers.
“We export green beans to Europe, they process the green beans mainly into soluble coffee or what we call instant coffee and it comes back to four countries in Africa,” Mr Barigye revealed.
He added: “So a production of about six to eight countries in Africa is being imported back into Africa by Algeria, Tunisia, Egypt, and to a less extent South Africa.” 

Determined
Africa, where coffee production is largely by rudimentary methods, is viewed as the frontier for growth in global output considering there is still room for machination and application of fertiliser and technology that could lead to enhanced yields. 
Farmers on the continent reap an average of three kilogrammes of coffee per tree whereas experts see the potential for seven kilogrammes, doubling earnings for millions of cultivators who depend on the cash crop for income.

Mr Barigye and his cohorts seem spot-on with their bet on processing. 
“People are getting into mechanisation for processing coffee. We believe it’s going to better the quality of coffee because some time back people were skipping some of these stages in processing coffee and it jeopardises the quality of coffee. So I think we are on a better roadmap,” said Mr Walter Umika, a businessman who sells coffee processing equipment.
 “If I see people buying more machines from me it also gives me hope that they also have hope,”  he said.     

AfCFTA opportunities

Mr Barigye claims a continental free trade area that is close to notching five years while being in effect is the key to unleashing Africa’s coffee potential.    

“Egypt being in the new Africa Continental Free Trade Area (AfCFTA) creates huge opportunities for us and that is why we are focusing on that agreement. We have a session where we are going to look at how we can benefit? How can we make continental trade work?” 

He adds: “Because it is close to the producing countries, most of the coffees in East Africa, DRC, Uganda, Ethiopia, Rwanda, Burundi, Tanzania, Zambia, Malawi, Kenya—so that is close to Egypt. 

The market within Africa is enough to consume all our coffee if we can add value the way the Europeans are doing.”
Mr Barigye, a coffee trader himself, knows it is one thing to identify a market; it is another to have the capacity to exploit it.
Indeed, he noted that the continent will have to strategically focus on partnerships to be able to challenge the existing systems of supply mechanism because there is already a supply chain of where a big multinational is getting coffee from Europe and bringing it back to Africa. 

“So African leaders will be challenging the ministers that will be present—the African leaders have to say, okay let us support each other to develop new supply chain that can facilitate trading within Africa,”   
Mr Barigye said, adding, “If there was one thing that could get me to say the conference was successful in my capacity as chairman for Uganda, it would be collaboration between the African countries to establish a new supply chain of processed coffee—processed in Africa, consumed in Africa.”