[March 16, 2006]

DJ India Tata Coffee Gets Land For Coffee Plant In Uganda

(Comtex Business Via Thomson Dialog NewsEdge)Mar 16, 2006 (Dow Jones Commodities News via Comtex) –KAMPALA Uganda (Dow Jones)-India’s Tata Coffee Ltd. (532301.BY) has been offered land to set up an instant coffee plant in the Ugandan town of Jinja, around 40 kilometers from Kampala, officials told Dow Jones Newswires Thursday.

 

Margaret Kigozi, executive director of the state-run Uganda Investment Authority, said Tata is among up to 20 companies that have been offered land for investment in the country since the beginning of the year.

Uganda has intensified efforts to cut over-dependence on the export of raw coffee, which has left Ugandan coffee farmers at the mercy of the volatile international coffee prices.

In December the state-run Uganda Coffee Development Authority said the government had signed an agreement with Libyan Arab African Investment Co. to build a $22 million instant coffee plant in the country.

Uganda is Africa’s second biggest coffee producer after Ethiopia but it exports nearly all its coffee output in the form of coffee beans, mainly to Europe and the U.S.

The country’s coffee output has continued to drop from around 3.6 million 60-kilogram bags in 1996-97 to 2.53 million bags last season.

Output for 2005-06 forecast at an 11-year low of 2.34 million bags, according to Kizoto Mayanja, the UCDA’s principle market analyst.

The drop is mainly attributed to the abandonment of the crop by farmers due to the volatile prices, unfavorable weather and the coffee wilt disease.

-By Nicholas Bariyo, Dow Jones Newswires, 256-752-624615;bariyonic@yahoo.co.uk

(END) Dow Jones Newswires