Addis Ababa, 08 March 2015 – The coffee community from Africa and around the world gathered in the Ethiopian capital for two days of engaging debate at the 4th World Coffee Conference, hosted by the Government of Ethiopia.
The 77 Member Countries of the International Coffee Organization (ICO) and over 900 attendees, including coffee growers and representatives from government, the private sector, and international agencies participated in a range of discussions related to the theme of the Conference, ‘Nurturing coffee culture and diversity’.
His Excellency Mr Hailemariam Desalegn, Prime Minister of Ethiopia, inaugurated the Conference and the First Lady of Ethiopia, Mrs Roman Tesfaye, addressed the audience during a panel on gender equality in the coffee sector.
Over 20 high-level speakers from around the world participated in debates and discussion around the theme of the Conference with issues ranging from gender equality in the coffee sector to the role of public policy in increasing farm productivity.
Coffee Market Outlook
The Executive Director of the ICO, Mr Robério Oliveira Silva, presented an outlook for the global coffee market to members of the press during the WCC in Ethiopia. ICO’s current estimate for global coffee production in crop year 2015/16 is of 143.4 million 60-kg bags, 1.4% higher than last year. Lower production in Brazil of 43.2 million bags has been compensated by increases in Vietnam, Colombia and Indonesia, among others. In Africa, production is rising by 6.1% to reach 17.1 million bags, representing nearly 12% of the world total. In Ethiopia, output is currently estimated at 6.4 million bags, 3.4% less than last year, as the inconsistent rains have had a negative effect on the crop. Looking ahead to crop year 2016/17, Brazil’s National Food Supply Company (CONAB) have initially estimated production in the country at between 49.1 and 51.9 million bags. This could potentially be a record crop for Brazil, higher than the 50.8 million produced in 2012/13.
Global coffee consumption in calendar year 2015 is estimated at 152.1 million bags, up from 150.3 million in 2014. Total consumption in importing countries is estimated at 104.9 million bags, while exporting countries have increased at an average rate of 2.1% over the last four years to reach 47.3 million bags.
These production and consumption figures suggest that 2015/16 will be another deficit year in the coffee market, with demand exceeding supply. This gap is being filled by buildup in stocks, particularly in exporting countries, in previous years when output was higher.
Coffee prices have stabilized recently, but they remain at very low levels. The average price of the ICO composite indicator price was 111.75 US cents/lb in February, 0.8% higher than the previous month, but down from 141.10 cents a year ago. This decline in the coffee market over the last 18 months has been mostly attributed to the ongoing depreciation in the Brazilian real against the US dollar, along with a broader weakness in global commodity prices.
Export levels have also remained strong, allowing inventories in importing countries to be well restocked and give roasters a considerable buffer against any short-term supply concerns. This has prevented prices from maintaining any significant rally.
About the World Coffee Conference
Every four to five years, the International Coffee Organization holds a high-level World Coffee Conference to enable discussion around critical topics for the global coffee sector. The first three Conferences took place in London (2001), Brazil (2005) and Guatemala (2010).
Uganda Coffee Development Authority will be holding coffee promotions dubbed “Coffee Expos 2016” in three regions of the Country, namely Central (Kampala), East (Mbale) and western Uganda (Marana and Fort portal.
The campaign starting today 18th March,2016 at Garden City shopping mall in Kampala before rolling out to other parts of the country is aimed at promoting local consumption, and at the same time attract players in the sector to showcase their products.
According to the Quality Assurance Manager of UCDA, Ms. Doreen R. Rweihangwe this drive will see operation of Coffee bazaars, demonstrations on coffee preparations by baristas, Coffee talks by experts and dissemination of Coffee relevant information.
UCF will be part of the drive to support and get you details of this important event.
Private Sector Foundation Uganda (PSFU) has entered into a Memorandum of Understanding with (MOU) with Buganda Kingdom to develop a corporation that will promote the business entities within Buganda Kingdom. The two parties shall explore modalities of collaboration, information sharing and working together to organize events, expos or trade fairs. They will also explore modalities of using their strategic resources to support business in the Kingdom to achieve enterprise growth, job creation and increased income while leveraging on the programmes managed by PSFU.
The signing ceremony was done at Bulange Mengo on 9th March 2016 by Mr. Gideon Badagawa Executive Director PSFU and Owek. Robert Waggwa Nsibirwa Minister of Finance Investments Planning and Economic Development. This was done in the presence of the Katikiro of Buganda Owek. Charles Peter Mayiga, Ministers from Buganda Kingdom and distinguished delegates from Private Sector Foundation Uganda (PSFU).
The Katikiro of Buganda Owek. Charles Peter Mayiga, thanked PSFU for the initiative and promised that the Buganda Kingdom will strongly work with PSFU to promote business, that will lead to competitiveness in the Buganda Kingdom. He noted that this partnership will also enable the Kingdom achieve its five-year business strategy.
The Katikiro called on the business people in the Buganda Kingdom to form partnerships and cooperatives that will enable them achieve more. “There is need for more investment in the Agricultural sector which employs more than 70% of Uganda’s population.” The Katikiro said.
Mr. Gideon Badagawa Executive Director PSFU thanked the Buganda Kingdom for the partnership and promised to support business competitiveness through various sectors. He called on the business people in Buganda Kingdom to use the opportunity to develop their businesses to enable them compete locally, regionally and at the international level.
Through this MOU, the businesses, cooperative groups and people living in Buganda will benefit from the various trainings, capacity building programs and access to grants managed by PSFU. The Kingdoms Partnership Unit in Buganda Investments and Commercial undertakings Ltd (BICUL) will work with the Kingdom Ministries and PSFU to ensure successful implementation of the various programs.
According to statistics from Uganda Coffee Development Authority, 30% of Uganda’s total crop exports end up in the Republic of Sudan earning the country millions of dollars plus employment opportunities along the supply chain. Coupled with this, is the significance of this bi-lateral trade as an important contributor to intra-Africa trade still considered to be lowest by recent studies.
All this good news could be at stake following new regulations issued by the Ministry of Cabinet where new and stringent measures have been proposed paralyzing trade.
According to the new measures all green coffees will have to meet new Quality tests on top of this are exorbitant fees levied by new certification agent.
Industry observers have welcomed this development with mixed reactions citing double certification, violation of I.C.O quality standards and making our market noncompetitive.
“It is strange that anybody would suspect Uganda coffee for atomic components considering we have never had major nuclear development or War” Remarked a coffee quality specialist looking at the new requirements.
The good news however, is that U.C.D.A and stakeholders have embarked on a diplomatic agenda to for an inter-governmental dialogue to resolve the contentious clauses of the new regulations to facilitate normal trade relations between the partner CO-MESA states.
Below are comments from some of the industry players:
“Sudan is an important market for our members, as UCF we are doing everything within our means to facilitate a speedy resolution of contentious issues for normalization of trade” – Betty Namwagala, ED UCF.
“I’m very optimistic that the on-going high level dialogue will cure the prevailing anxiety so that things move on normally” – KDS Managing Director Ishaac Lukenge
“We have running contracts with our Sudanese buyers so any further delay in handling this matter could jeopardize our contractual obligations” – Mr. Hemish Dave MD Export Trade Co.
“Any attempt to halt trade gravely affects the farmers who are the most vulnerable within the value-chain thus all players must navigate this situation at a terrific speed” – Seaton Mathew, Kyagalanyi.