Drought: Power outages hit Uganda’s coffee output

By WAIRAGALA WAKABI
Special Correspondent

The prolonged drought experienced in East Africa between late 2005 and the start of this year continues to hit Uganda’s coffee output just as prices on the world market are recovering.

On a cumulative basis, between October 2005 and April 2006, the value of Ugandan coffee exports rose by 25 per cent to $102.7 million, but volumes fell 18 per cent to 1.18 million 60-kg bags.

Last month, the country’s coffee export volumes continued the slide that started five months ago, with volumes down 30.6 per cent compared with the same period last year, owing primarily to the severe drought that has hit the East African region since the end of 2005.

April export volumes were 146,642 bags compared with the 211,383 bags exported in April 2005, according to a report from the regulatory Uganda Coffee Development Authority (UCDA). Earnings were $13.74 million compared with $15.35 million in the corresponding month last year. The authority had in March projected April exports of 165,000 bags, which it hoped would be drawn mainly from the buffer stocks held by various players in the industry supply chain.

In March, Uganda exported 156,010 bags worth $14.7 million, representing a drop of 20.2 per cent in volume and a rise of 5.3 per cent in value over the same month last year. February 2006 exports fetched $16 million.

“The decline in volumes is attributed to a small crop yield in 2005/2006 arising from the drought that caused widespread defoliation of coffee trees,” the UCDA said last week. Drought also exacerbated the coffee wilt disease, which has infected thousands of coffee trees. This month’s exports have been pegged at 150,000 bags since the new crop from the main season in the southern and western regions has started trickling in.

Uganda registered a sharp decline in coffee exports for the month of March, which the UCDA blamed on prolonged and frequent power outages.

“The situation has been made worse by the intermittent loadshedding that has adversely affected coffee processing both at primary and export levels,” the authority said.

The International Coffee Organisation (ICO) says global coffee industry is recovering from several years of glut and low prices, as producers’ stocks are now at their lowest level ever. Importers are reportedly holding 20 million bags, while the producers have only limited buffer stocks.

The ICO says stocks held by producing countries in 2006/07 will total between 20 million and 22 million bags. While a substantial 9 million bags will be held by Brazil, the world’s main producer and exporter, this will be just half the figure for the previous season and the lowest level in nearly 50 years.

It is anticipated that global coffee production will rebound in 2006/07 to 121 million bags from the previous years 107.15 million bags, whereas consumption is expected to grow modestly to 117 million bags for the coming season.

The ICO is meanwhile sponsor- ing and supervising a pilot coffee project to assist farmers in areas less than 600 metres above sea level to grow more profitable alternative crops. Ali Mchumo, managing director of the Common Fund for Commodities, which is financing the project being tested in Mexico, said a number of countries have expressed interest in the project. If the pilot proves successful, CFC will circulate the results to other countries.

“The volatility of coffee prices threatens the livelihoods of a large number of small-scale growers,” he said. Growers could therefore not generate sufficient profits to sustain their livelihoods due to the low prices and the productivity of the coffee produced.