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Uganda has embarked on a campaign through which it hopes to cease exporting raw coffee and add value to its beans in order to obtain better prices from its main export.
Among the significant measures planned is the manufacture of instant coffee in the country. A feasibility study is already in its advanced stages and a report on this project is expected to be ready in July, according to officials of the Uganda Coffee Development Authority (UCDA), the local regulatory body.
The study was commissioned recently after a project to produce soluble coffee by a consortium of exporters at the Bukoba plant in neighbouring Tanzania proved profitable. The Star Cafe brand is manufactured from pure Uganda robusta and is currently competing favourably with imported brands on the local market.
According to UCDA, Uganda is capable of earning gross revenue of US$15 from every 3kg of green coffee after it has been processed into instant coffee, compared with only US$1.5 when exported in its raw form. The European Union is the main buyer of the country’s coffee.
The country’s earnings from coffee exports are estimated to have increased by about 27.9%, from US$85.3mn in 2001/02 to US$109mn in 2002-03. This increase was on account of a 25.9% and a 1.6% increase in price and volume respectively. A total of 3.21mn bags was exported at an average annual price of US$0.57 per kg compared with US$0.46 per kg registered in the 2001-02 financial year.
The UCDA says coffee export prices fell by almost 70% between 1998 and 2002, leading to a US$222mn decline in export earnings.
The country is now promoting the growing of organic coffee, which fetches better prices on the world market.
Organic coffee is grown without the use of fertilisers and pesticides, and so is perceived as healthier and thus fetches a better price. More than 1,000 tonnes were exported last year and fetched a price of US$300 per tonne.