According to the Uganda Coffee Development Authority (UCDA), the body responsible for regulating all “on” and “off” coffee farm activities in Uganda, coffee is the oldest, most significant commercial agricultural commodity and major foreign exchange earner, contributing an annual average of 15% to Uganda’s total export revenue in the last ten years.

Uganda produces two types of coffee: Robusta and Arabica. It is the fourth largest Robusta producer in the world, after Vietnam, Brazil and Indonesia. Some Arabica is also grown in different highland areas of the country, most notably on the slopes of Mount Elgon on the border with Kenya and on the slopes of the Mount Rwenzori, popularly known as the ‘Mountains of the Moon’, on the border with the Democratic Republic of the Congo. Some Arabica coffee is also grown in the West Nile region in the northwestern part of the country. Uganda is the origin of Robusta coffee, which was cultivated along the Lake Victoria crescent. While the milder Arabica varieties originated in Ethiopia, the Robusta species are indigenous to the Nganda regions of Uganda. Wild varieties are still found in the foothills of the Rwenzori Mountains in western Uganda, where they are harvested as a specialty ECO coffee and marketed as the “Kibaale wild”.

COFFEE FARMING

Though coffee farming is still dominated by small-scale producers, the government’s intention is to transform the economy from its current level to a middle income status through agricultural transformation defined in Uganda’s Vision 2040.

Coffee is produced by an estimated 1.7 million coffee farmers from 108 districts. The altitude ranges from 800 to 1,400 meters above sea level for Robusta and 2,300 to 6,000 metres above sea level for Arabica. The high altitude, especially for Ugandan Robusta, makes it very unique and characterised by intrinsic quality characteristics/attributes. Sustainable and specialty12 coffees are being sold to niche markets at high premiums compared to conventional grades.

Planting is normally between March and May (first rains) and September to November (second rains). In Northern Uganda, the region experiences one long rainy season from March to August. The harvesting seasons alternate as main and minor harvest depending on whether the region is in the Northern or Southern hemisphere.

Uganda boasts of a number of estate farms led by the Kaweri Coffee Plantation in Mubende District, which has an area of 2,500ha under Robusta coffee. Others include Dr Ian Clark’s farm in Kabarole District, with 320 acres of Robusta. Estate farms are estimated to account for about 5% of the total area under coffee.

Inorganic fertilizer use is extremely low, with use of organic fertilizers (farmyard manure) is being higher. This justifies the increasing number of farmers who are certified as organic or Fairtrade farmers. Nonetheless, the proportion of farmers who are using inorganic fertilizers is changing.

EXPORT NUMBERS

UCDA says coffee exports for 12 months (Financial year 2021/22) totaled 6.26 million bags worth US$ 862.28 million compared to 6.08 million bags worth US$ 559.16 million the previous year (Financial year 2020/21). This represents an increase of 3% and 54% in both quantity and value respectively, the UCDA June Coffee Report reveals (https://ugandacoffee.go.ug/file-download/download/public/82).

Uganda’s coffee exports for the month of June amounted to 530,365 60-kilo bags of coffee valued at US$ 83.79 million. This comprised 444,197 bags of Robusta valued at US $60.98 million and 86,168 bags of Arabica valued at US$ 22.82 million. This represented a decrease of 14% in quantity but an increase of 43% in value compared to the same month last year.

Farm-gate prices for Robusta Kiboko averaged UGX 2,600 per kilo; FAQ UGX 6,450 per kilo, Arabica parchment UGX 10,500 per kilo and Drugar UGX 9,500 per kilo.

Robusta exports accounted for 84% of total exports higher than 77% in May 2022. By comparing quantity of coffee exported by type in the same month of last Coffee Year (June 2021), Robusta decreased by 21.44% in quantity but increased by 21.37% in value. The decrease in Robusta exports was mainly attributed to lower yields this year that were characterized by drought in several regions. This led to a shorter main harvest season in Central and Eastern regions and reduced harvests from Greater Masaka and South-Western regions whose peak was expected in July 2022.

Arabica exports increased by 62.77% and 174.46% in quantity and value respectively due to an on-year cycle characteristic of Arabica coffee production. Arabica fetched an average price of US$ 4.41 per kilo. Okoro CP/B from West Nile sold at the highest price of US$ 7.23 per kilo.

Ten exporters out of 55 companies which performed during June exported 74% of the total volume.

Italy maintained the highest market share of 40.25% followed by Germany 11.3%, Sudan 10.3%, India 7.4% and Morocco 4.8%. Coffee exports to Africa amounted to 109,506 bags, a market share of 21% compared to 70,782 bags (16%) the previous month.

Coffee exports for July were projected to be 600,000 bags.

OPPORTUNITIES FOR INVESTORS

According to https://www.africa-uganda-business-travel-guide.com/uganda-coffee.html, the Uganda Coffee subsector has a good number of investment opportunities from which you can start a profitable business. The business opportunities start right from coffee production at the farm to serving it at the coffee table.

Uganda produces two types of coffee: Robusta and Arabica in the proportions of 80% and 20%, respectively. Arabica coffee is grown at high altitudes while Robusta is grown at relatively lower altitudes in areas around the Lake Victoria basin.

Being astride the equator, Uganda has two distinct harvesting seasons: Oct/Dec & May/Jul; north and south of the equator respectively.

Advantages at the farm level include:

• Availability of land and fertile soils ideal for coffee production
• Good climate characterized by a bi-annual rainfall distribution
• Availability of labour and no taxes in the agricultural sector.

Primary Coffee Processing Opportunities.

You can profit by establishing a central coffee washing station.

When you invest in this business opportunity you will be complementing the Uganda Government Initiatives under a Strategic Export Programme (SEP).

The ongoing Uganda government coffee-replanting programme puts emphasis on creation of catchment areas of red cherries for all central pulperies that may come up. This means that when you set up your washing station, the Uganda government will direct clients to you.

Coffee Exporting Business Opportunities

To enter the Uganda coffee export business, you will need do the following:

• You need to incorporate your company in Uganda
• You need to have access to Coffee export grading facilities, and
• You need to execute a performance bond with a reputable insurance company or have a bank account with not less than US $25,000.
• You will also have to pay an annual export license at a fee of Shs. 1,500,000 (USD 900)
  
  

Uganda Coffee Shops & Roasting Business Opportunities

With the presence of Internet Cafés in virtually every town, the youth are becoming more and more enthusiastic about coffee drinking. One could take advantage of this upcoming lucrative market by establishing a coffee outlet or a coffee roasting unit. Uganda currently has less than 10 registered coffee shops.

Input Suppliers Business Opportunities

You have an opportunity to invest in supply of inputs to enhance productivity in the agricultural sector in general. In the coffee subsector farmers have been organized into grassroots coffee farmers associations, one can sale your input supplies to these groups in bulk. The inputs with good demand include implements, fertilizers, pesticides, irrigation equipment, and moisture analyzers.