Uganda Projects Low Coffee Earnings in Anticipation of Brazil's Bumper Harvest
Uganda is projecting lower earnings from coffee exports despite a 3.1 per cent surge in production as the international coffee market braces for an anticipated bumper crop in Brazil.
Production in Uganda is expected to increase by another 100,000, 60-kilogramme bags to cap the season at 3.3 million bags.
However, the Uganda Coffee Development Authority cautioned that earnings were likely to be lower due to a likely dip in global prices on the back of a considerable rise in production by leading producers Brazil and Vietnam.
The country exported 3.2 million bags valued at $460 million last year.
“Coffee prices are likely to drop on account of an anticipated higher on-year crop from Brazil for the 2012/13 harvest that starts in April/May,” said UCDA principal information officer Rogers Kizito-Mayanja.
“The downward pressure on prices is likely to be moderated by a buoyant global demand that is increasing at 2.4 per cent per year,” he added.
Brazil is anticipating a 2.6 per cent rise in output this year that will see production reach 53.9 million bags in the 2012-13, up from a previous forecast of 52.53 million bags in November.
Vietnam, however, is forecasting a 21 per cent drop in its coffee export to 16.41million bags for 2012, down from 20.83million bags shipped last year.
UCDA said Uganda’s exports from October through February climbed to 1.16 million bags worth almost $172 million from 1.1 million bags valued at $142 million a year earlier.
The country exports most of its coffee to the European Union, South Sudan, Russia and the US.
Uganda’s robusta beans, which are used in espressos and instant drinks, account for about 85 per cent of the nation’s annual production.
Coffee output in Uganda has declined from 4.4 million bags in 1996-97, partly because of damage caused by the coffee-wilt disease.
Rwanda, is predicting a 50 per cent rise in output this year on the back of good rains late last year.
The country exported 229,000 bags last year, according to Rwanda’s National Agricultural Export Development Board (NAEB).
Rwanda, a much smaller producer compared with Uganda, has become famous for growing high quality Arabica coffee beans much of which is exported mainly to the US, Europe, Japan and South Korea.