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Coffee exports take hit from Sudan’s economic chaos
A coffee farmer sorts coffee beans. Sudan, one of the big markets for Uganda’s coffee, has been disappearing due to economic mismanagement. FILE PHOTO
What you need to know:
- Records from Uganda Coffee Development Authority show that in April, the country exported 15,050 bags, down from 51,100 bags exported last in March, Dorothy Nakaweesi writes.
The aroma of Uganda’s coffee in Sudan has been diminishing on the back of economic disruption in lure of the oil resource of the country.
Records from Uganda Coffee Development Authority (UCDA) show that in April, the country exported 15,050 bags, down from 51,100 bags exported last in March.
The exports which have been volatile saw the country export its least in November, when only 700 bags were shipped.
During the normal days, Sudan imports over 20 percent off Uganda’s 4.7 million kilogramme bags of coffee annual exports.
This consignment brings in revenue worth $100 million (Shs375 billion) thus making Sudan the second single importer of Uganda’s coffee.
However, information from Ugandan exporters located there is volatility in the demand as Sudanese buyers are experiencing challenges in obtaining foreign currency.
This situation is now affecting their coffee importing orders from Uganda.
The impact of this state of affairs has been evidenced in Uganda’s declining export figures since October last year.
In an interview with Prosper magazine, Mr Alistair Sequeira, the managing director Kyagalanyi Coffee, said: “This is a big problem for Uganda because Sudan is a big market that has essentially been disappearing. They are now buying in very small quantities because they don’t have foreign currency.”
He said this is happening in the midst of low international prices - a situation that has affected the incomes of all those along the value chain.
“We are in the off season in Central Uganda. But expect harvest in Western parts of the country in May and if prices remain low then this is going to be a big challenge,” he added.
However, some of the exporters to Sudan said in the past few days some importers are slowly making inquiries while others are ordering for coffee.
Mr Michael Nuwagaba, the chief operations officer Ugacof, sharing their experience, said: “The chaos in Sudan coincided with the low global prices and they are seeing importers buying more coffee from them.”
Latest records from UCDA indicate that the country in the month of March exported a total of 348,230 Kilogramme bags valued at $34.1million (Shs127b).
Although there was a 4.4per cent increase in volumes exported compared to the same period last year, there was a decline in value earned.
“This consignment was sold at $1.63 per kilogramme lower than the previous month’s $1.68 per kilogramme further indicating a global price drop,” UCDA report showed.
The report shows that in the last 12 months (April 2018-March 2019), Uganda exported a total of 4.11m kilogramme bags worth $421m (Shs1.5 trillion).
This was lower than the 4.69m kilogramme bags worth $528m (Shs1.9 trillion) exported the previous year.
“Notable factors that led to this performance were largely low global prices on the account of high crop in Brazil which affected the export prices,” the report showed.
How Sudan’s woes started
In December 2018, the government tried to stave off economic collapse brought on by years of US sanctions and loss of oil revenue by imposing emergency austerity measures and a sharp currency devaluation.
Cuts to bread and fuel subsidies sparked demonstrations in the east over living standards, but the anger soon spread to the capital, Khartoum.
The lifting of most sanctions in 2017 failed to help the country, which had lost most of its oil fields when South Sudan became independent in 2011.
