Ugandan coffee processors seek direct sales to bolster earnings

UGANDA – Ugandan coffee processors have unveiled plans of trading their commodity directly with buyers, by passing the widely used auction markets, in a move to secure more earnings from the sales, reports Daily Monitor.

Speaking to officials from Trade Mark East Africa at Uganda Coffee Development Authority offices in Uganda, Mr John Nuwagaba, general manager at Ankole Producers Cooperative Union said that adopting direct sales will stimulate an overall growth in the sector.

During the meeting that was held to monitor the progress the Uganda Electronic Single Window whose objective is to hasten exports as well as imports, Mr Nuwagaba highlighted that Europe remains a key market to Ugandan coffee.

Additionally, Mr Joseph Nkandu, the National Union of Coffee Agribusiness and Farm Enterprises (Nucafe) executive director, said in the side-line 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% more profit than you would get through auctioning,” he said.

According to Mr Frank Matsaert, the Trademark East Africa chief executive officer, the single window initiative 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, reports Daily Monitor.

Data from the Central Bank reveal that Uganda exported 246 000 tonnes of coffee for the year ended 2018, fetching more than US$436 million.

Compared to 2017, this represented a 12.7% decline in exports from 282 000 tonnes exported in 2017 valued at US$555 million.

The country has embarked on improving the export to over 1 million tonnes in the coming years.

Coffee and cocoa being major cash crops in the country’s economy have received a major boost from European Union (EU) which granted Uganda US$4.1 million to boost the commodities value chains.

Uganda is a major coffee exporter to EU with the commodity exports valued at US$351 million contributing to 60% of all Ugandan exports to EU for the last decade.

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