Uganda’s coffee sector hits record US$1.4B in exports

Food Business Africa Magazine

Data from the Uganda Coffee Development Authority (UCDA) indicates a 46.96 percent increase in revenue from the previous year’s US$940.1 million, driven by a 5.25 percent increase in export volume from 6.14 million bags.

The UCDA attributed the higher value of exports to surging global coffee prices, fueled by dry conditions in major coffee-producing nations such as Brazil and Vietnam, which have impacted yields and are expected to result in a supply deficit for the 2024/25 season.

Within Uganda’s export market, 75 percent of the total volume was handled by 10 key exporters out of 66 active companies. Sustainable Arabica coffee commanded the highest price, reaching US$5.58 per kilogram.

Despite the record-breaking earnings, Uganda’s coffee sector is currently facing a contentious debate over a government proposal to dissolve the UCDA and transfer its responsibilities to the Ministry of Agriculture, Animal Industry, and Fisheries (MAAIF).

This proposal, part of a broader effort to streamline government functions and reduce administrative costs, has sparked opposition from lawmakers and stakeholders, especially from coffee-growing regions.

Critics argue that dissolving the UCDA could undermine the significant progress Uganda has made in quality assurance, international marketing, and support for smallholder farmers.

“UCDA has been instrumental in establishing Uganda’s coffee on the global market. Dismantling it could erase years of development and jeopardize smallholder farmers’ incomes,” said Asinasi Nyakato, Woman MP for Hoima City.

Advocates of the UCDA’s preservation also cite examples from other leading coffee-producing nations, which rely on specialized agencies to manage their coffee industries.

Florence Kabugho, Woman MP for Kasese, emphasized the need for specialized regulation to avoid potential risks that could disrupt the sector.

Currently, nearly 75 percent of Uganda’s coffee exports are destined for European markets, with Italy, Germany, and Belgium as the primary importers.

The sector also benefits from strong demand in regional African markets, with Morocco, Sudan, and Kenya collectively purchasing approximately 700,000 bags valued at UGsh630 billion (US$172.2M).

The UCDA remains committed to its ambitious Coffee Roadmap target of producing 20 million bags by 2030.

The roadmap, launched in 2017 and endorsed by President Yoweri Museveni, aims to boost Uganda’s coffee production with an expected annual foreign exchange earning of US$1.5 billion.