Uganda coffee exporters in May marked the highest earnings the commodity has made in a single month for nine years.
Coffee prices have risen by 9.1 per cent on the world market, driven by insufficient supplies from Vietnam, hitting high averages of $1.62 per kg, compared with $1.48 per kg in May 2006. Vietnam is the world's second biggest producer of coffee after Brazil.
Uganda is a leading world producer of robusta coffee, the variety accounting for 85 per cent of its total production. The country is now enjoying premiums on robustas, whose international prices shot up to $1,918 per tonne from $1,100 per tonne last year and tripling since 2004.
The monthly economic performance report from the Ministry of Finance says coffee export earnings amounted to $17.9 million in May this year, representing an increase of 63.3 per cent on a year-on-year basis while export volumes rose by 50 per cent to 184,560 60-kg bags over the same period boosted by exports of robusta coffee.
According to the May report from the Uganda Coffee Development Authority (UCDA), coffee export earnings for the period July 2006 to May 2007 cumulatively amounted to $204 million, representing an increase of 28 per cent compared with the outturn of the same period last financial year, while exports volumes have increased by 20 per cent to 2.3 million 60-kg bags.
Dr. Ezra Suruma, Minister for Finance, projected during the presentation of the national budget in June that coffee exports would fetch the economy $224 million this financial year, an increase of 29 per cent over 2006/07.
This would increase coffee's contribution to the country's foreign exchange earnings to about 40 per cent. Coffee is the second highest export foreign exchange earner after remittances and remains the country's leading visible export.
Although the 29 per cent increase projected this year is huge, it is a far cry from what the country earned in the 1970s. Uganda earned $588.5 million from 2.45 million bags in 1976/77, the highest ever. UCDA records show another high earning point was in 1977/78 with $312 million; the lowest recorded coffee production of only 1.7 million bags since the country got independence. The country has since been producing more but earning less as world prices have dropped.
The East African
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