Ucda Report May 2009

UCDA MONTHLY REPORT FOR MAY 2009 In This Issue: -

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This is the eighth monthly report for the coffee year (Oct/Sept. 2008/09).

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A total of 220,620 60-kilo bags valued at US $ 20.26 m were shipped in May 2009, posting a 5% and 31% drop in volume and value respectively compared to May last year.

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Unit export price averaged 153 cents/kilo, 2 cents down compared April and March 2009.

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Farm-gate prices for Robusta Kiboko oscillated between Shs. 1,0001,200 per kilo and FAQ was Shs. 2,100 – 2,500 while Arabica parchment prices averaged Shs. 2,600 per kilo.

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Coffee exports in the first eight months (Oct/May) of the coffee year 2008/09 totalled 2,078,754 bags worth $ 202.80 m, 0.4% up in volume and 16% down in value compared to a similar period last year.

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On a year-to-year basis, shipment in the 12 months (May/Apr 2008/09) totalled 3.22 m bags, 7.7% up compared to a similar period last year. This comprised Robusta –2.62 m bags and Arabica – 0.60 m bags

Coffee shipment from Uganda in the month of May 2009 totalled 220,620 60-kilo bags valued at US $ 20.26 m, representing a drop in volume and value of 4.7% and 31.3%, respectively compared to the same month last year as illustrated in table 1.0. TABLE 1.0 COMPARATIVE COFFEE EXPORT PERFORMANCE – 60-KILO BAGS; US$ MONTHS G/ Total October  Robust a  Arabic a Novemb er  Robust a  Arabic a Decembe r  Robust a

2008/09 Qty Value $ 2,078,75 202,802,1 4 98 21,003,59 179,564 6

2007/08 Qty Value $ 2,071,0 242,427,0 96 56 17,649,99 172,576 2

%-Age Change Qty Value $ 0.37

-16.35

4.05

19.00

151,485

17,185,337

132,179

12,746,997

14.61

34.82

28,079

40,397

-22.12

198,864

4,902,995 21,000,15 3

-30.49

266,722

3,818,259 27,598,38 7

34.12

31.42

220,258

21,705,523

165,986

16,742,817

32.70

29.64

46,464

32,878

38.42

272,519

4,257,336 29,484,78 6

41.32

298,978

5892,864 29,240,13 5

9.71

- 0.83

251,716

23,361,825

237,168

24,416,389

6.13

- 4.32

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UCDA Monthly Report: May 2009

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Arabic a

47,262

January  Robust a  Arabic a

329,211

5,878,310 30,469,34 6

35,351

33.69

15.98

360,875

5,068,397 39,727,03 7

-7.94

-22.65

269,395

24,046,556

326,466

34,736,650

-16.56

-30.03

59,816

34,409

321,355

318,346

4,990,387 37,024,60 8

73.83

February  Robust a  Arabic a

6,422,790 31,204,06 2

28.70 (15.72 )

250,114

22,641,801

281,916

31,609,614

71,241

36,430

March  Robust a  Arabic a

256,579

8,562,262 23,938,25 7

279,248

5,414,993 36,298,20 8

195,857

16,794,596

238,938

30,141,261

60,722

April  Robust a  Arabic a

205,725

7,143,661 19,084,25 4

142,893

11,779,982

62,832

May  Robust a  Arabic a

220,620

7,304,272 20,264,16 1

157,999

12,909,669

62,621

7,354,492

40,310

6,156,947

237,226

31,755,49 2

177,037

22,315,520

60,189

9,439,993

231,442

29,486,78 0

178,309

21,476,544

53,133

8,010,236

0.95 (11.28 ) 95.56 -8.12 -18.03 50.64 -13.28 -19.23 4.39 -4.68 -11.39 17.86

(28.37) 58.12 -34.05 -44.28 16.03 -39.90 -47.21 22.62 -31.28 -39.89 -8.19

The 4.7% drop in volume recorded in May notwithstanding, total exports in the first eight months (Oct/May 2008/09) totalled 2,078,754 bags, 0.37% higher than what was recorded in a similar period last year. The corresponding value however, fell by 16.4% from $ 242.4 m to $ 202.8 m in tandem with the global price movement. The Chart below shows comparative export performance in the last 3 years in terms of coffee type, Arabica and Robusta, during the period Oct/May. There was an improvement in Arabica coffee quantities from 338,097 bags last year to 439,037 bags this year, a 30% rise. The rise is largely due to adoption of improved agronomic practice supported by good weather conditions, coffee planted continuing to come into production and a noticeable reduction in the incidence of pests and diseases. In contrast, there has been a 5.7% drop in Robusta quantities during the period, from 1,737,999 bags to 1,639,717 bags, which is explained by the 4 months’ dry spell that affected the fly crop in the Robusta growing regions. Figure 1 Comparative Coffee Exports in Oct/May - Robusta, Arabica & Total in 60-Kilo Bags

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UCDA Monthly Report: May 2009

On a year-to-year basis, coffee exports in the twelve months (Jun/May 2008/09) totalled 3.22 m bags, comprising 2.62 m bags of Robusta (81%) and 0.60 m bags of Arabica (19%); an improvement of 7.7% compared to a year ago when 2.99 m bags – Robusta 2.52 m bags (84%) and Arabica 0.48 m bags (16%) - were recorded. 1.

EXPORTS BY TYPE AND GRADE

Table 2.0 shows coffee exports by type, grade and realised price for each grade during the month of May 2009. The weighted average price dropped from 155 cents per kilo in April and March to 153 cents. Realised prices for Robusta continued to drop from 151 ct/kilo in February to 143 cents in March, to 137 cents in April, and to 136 cents in May. On the other hand, the weighted average price for Arabica rose from 194 in April to 196 cent per kilo in May. Among the Robusta grades, organic Robusta fetched the highest price of 180 cents/kilo followed by washed Robusta at 153 cents, an improvement from 176 cents for organic. In the case of Arabica coffee, Organic Okoro realised the highest price of 247 cents/kilo, followed by Bugisu AA at 227 cents, down from 203 cents and 222 cents respectively recorded in April 2009. TABLE 2.0

COFFEE EXPORTS BY TYPE, GRADE, & UNIT PRICE IN MAY 2009 – in 60-kilo bags; US $, US $/kg – QTY PRICE TYPE/GRADE Value $ 60-Kilo %$/Kilo Bags AGE 20,264,16 G/TOTAL 220,620 1 1.53 12,909,66 ROBUSTA 157,999 100.00 1.36 9 Washed Robusta 283 0.18 26,017 1.53 1. Organic Robusta 1300 0.82 140,224 80 Screen 18 16,474 10.43 1,429,228 1.45

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UCDA Monthly Report: May 2009

Screen 17 7,808 4.94 694,062 1.48 Screen 15 84,786 53.66 7,113,694 1.40 Screen 14 2074 1.31 176,017 1.41 Screen 13 2672 1.69 219,134 1.37 Screen 12 24,812 15.70 1,950,885 1.31 BHP 1199 5,750 3.64 383,757 1.11 1 Other Rob. 12,040 7.62 776,651 1.08 ARABICA 62,621 100.00 7,354,492 1.96 Organic Okoro 720 1.15 106,667 2.47 Bugisu AA 8,710 13.91 1,184,052 2.27 Bugisu A 5,425 8.66 728,338 2.24 Arabica AB 5,270 8.42 651,367 2.06 2.15 Arabica CPB 2560 4.09 329,738 2.15 Bugisu C 1640 2.62 180,689 1.84 Bugisu PB 1320 2.11 164,102 2.07 Mixed Arabica 640 1.02 63,492 1.65 Wugar 4,000 6.39 521,564 2.17 Drugar 26,776 42.76 2,985,898 1.86 Other Arabicas 5,560 8.88 438,585 1.31 1 Represents such coffees like Sc.1299, Sc. 1599, Sc. 1899, etc. in robusta.

2.

PERFORMANCE BY INDIVIDUAL EXPORTER

Table 3.0 below shows the performance of the individual coffee exporting companies during the month of April 2009. The top 10 companies together held a market share of 92%, down from 94% in the previous month. These included: Kyagalanyi Coffee Ltd – 17.8% (15.4%), Kampala Domestic Store – 12.0% (13.9%), Savannah Commodities Ltd. – 11.1% ((2.9%), Great Lakes – 10.3% (8.9%); Kawacom (U) Ltd. – 10.2% (17.0%); and so on. The figures in brackets indicate their performance in the previous month – April 2009. The number of registered coffee exporting companies in 2008/09 has gone up from 29 last year to 37, the new ones being Coffee World Ltd., Ankole Coffee Processors Ltd., Ankole Coffee Produce Coop Union Ltd., LD Commodities Ltd., Yaka (U) Ltd., Green Holdings, Bagain (U) Ltd., and Queen Commodities Ltd.

Table 3.0 INDIVIDUAL EXPORTER PERFORMANCE IN MAY 2009 QTY %-age Market Share EXPORTER 60-kilo Individual Cumulativ bags e GRAND TOTAL 220,620 100.00 1 Kyagalanyi Coffee Ltd. 39,237 17.78 17.8 2 Kampala Domestic 26,420 11.98 29.8 Store 3 Savannah Commodities 24,526 11.12 40.9 4 Great Lakes 22,786 10.33 51.2

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UCDA Monthly Report: May 2009

5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1

3.

Kawacom (U) Ltd. Ugacof Ltd. . Ibero (U) Ltd. Olam (U) Ltd. Job Coffee Lake Land Holdings Ltd.

22,498 18,548 15,916 14,104 11,780 7,330

10.20 8.41 7.21 6.39 5.34 3.32

61.4 69.8 77.0 83.4 88.8 92.1

Wabulungu Multipurpose Coffee World.

5,124

2.32

94.4

4,170

1.89

96.3

Nakana Coffee Factory

2,338

1.06

97.4

Mbale Importers & Exporters Kitasha

2,320

1.05

98.4

700

0.32

98.7

Gumutindo.

640

0.29

99.0

Bakwanye

640

0.29

99.3

Coffee Service International UNEX.

640

0.29

99.6

320

0.15

99.7

Green Holding.

300

0.14

99.87

Kaweri Coffee Plantation.

283

0.13

100.00

LOCAL SITUATION

The inflows of FAQ at export grading factories were slowly increasing in volume and of good quality in appearance, moisture content and in the cup. The price for FAQ hovered between Shs 2250 – 2,400/= per kilo but farmer groups with sizeable quantities negotiated for better

prices. Arabica parchment prices averaged Shs. 2,500 per kilo. Harvesting of Bugisu Arabica from Mt. Elgon area was at the tail-end so was that in Kasese.

Coffee trading in the Masaka and southwestern regions is in full gear supported by the onset of the dry season. The deliveries from the area had a good outturn of around 57%. Farmers and farmer groups have continued to demand for clean planting materials and/or seed to raise their own seedlings for the subsequent planting season. This is a result of the good farm gate prices enjoyed by farmers in the last 3 year; and the fact that coffee is key in the President’s Election Manifesto: 2006. However, the continued depreciation of the shilling against the US Dollar has put agro-inputs out of reach for most farmers. 4.

COFFEE EXPORTS BY DESTINATION

Table 4.0 shows the main destinations of Uganda coffee during the month of May 2009. Coffee shipments to EU countries totalled 163,353 bags (74.0%) in May up from 159,784 bags (77.7%) in April, Page 5

UCDA Monthly Report: May 2009

207,824 bags (81%) in March, 238,460 bags (74.2%) in February, 263,576 bags (82.1%) in January, and 250,177 bags (83.7%) in December. This was followed by Sudan with 37,792 bags (17.3%) compared to 32,197 bags (15.7%) in April, 17,152 bags (6.7%) in March, 59,090 bags (18.4%) in February, 32,550 bags (10.1%) in January 2009, and 30,000 bags (10.3%) in December 2008.

Table 4.0 MAIN DESTINATIONS OF UGANDA COFFEE IN MAY 2009 EXPORTER

QTY 60-Kilo Bags

GRAND TOTAL 1 2 3 4 5 6 7 8 9

5.

%- Age Market Share Individual Cumulativ e

220,620 163,353 37,792 14,491 2,400 664 640 640 320 320

EU1

Sudan USA India Israel Egypt Kenya Canada South Africa

100.0 0 74.04 17.13 6.57 1.09 0.30 0.29 0.29 0.15 0.15

74.04 91.17 97.74 98.83 99.13 99.42 99.71 99.85 100.00

BUYERS OF UGANDA COFFEE

Table 5.0 represents the buyers of Uganda coffee in the month of May 2009 where the top 5 in terms of quantity were: Ecom Agro industrialists accounting for 10.2% against 16.6% in April; Sucafina – 8.3% (12.2%), Socadec – 8.1% ((3.9%), Aldwami – 8.1% (3.2%) and Volcafe – 7.8% (9.7%), who collectively held a market share of 42.5%, down from 52.4% in April and 55.4% in March. The figures in parenthesis stand for the market share held by each buyer in the preceding month. TABLE 5.0

BUYERS OF UGANDA COFFEE IN MAY 2009: 60-kilo bags

BUYERS

1 2 3 4 5 6 7 8 9 1 1

GRAND TOTAL ECOM AGRO INDUSTRIALISTS SUCAFINA SOCADEC ALDWAMI VOLCAFE BERNARD ROTHFOS OLAM INTERNATIONAL DECOTRADE COEX COFF ICONA CAFE

QTY 60-kilo bags 220,620 22,498 18,200 17,886 17,842 17,230 15,916 14,764 10,420 9,540 9,118

%-age Market Share Individual Cumulativ e 100.00 10.20 10.20 8.25 18.45 8.11 26.55 8.09 34.64 7.81 42.45 7.21 49.67 6.69 56.36 4.72 61.08 4.32 65.40 4.13 69.54

EU countries are: Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Poland, Portugal, Rumania, Slovakia, Slovenia, Spain, Sweden, The Netherlands, and UK.

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UCDA Monthly Report: May 2009

0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8

ABACO

7,700

3.49

73.03

STRAUSS COMPANY

7,407

3.36

76.39

HAMBURG COMPANY

6,544

2.97

79.35

AZIENDE

4,978

2.26

81.61

COFFTEA (SUDAN)

4,900

2.22

83.83

AMERECAN

4,740

2.15

85.98

LAMCO

4,738

2.15

88.12

26,199

11.88

100.00

OTHERS

COFFEE DEVELOPMENT AND PROMOTIONAL ACTIVITIES

6.

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Inauguration of UCDA Board of Directors: On May 12, 2009, the Minister of Agriculture, Animal Industry & Fisheries (MAAIF), Hon. Hope Mwesigye, MP, Kabale district, officially inaugurated the UCDA Board. In her inaugural speech, the Minister thanked the Board members for accepting the responsibility and called upon them to create synergies with agencies and departments within the ministry for the benefit of the ordinary farmer. She cautioned them that they had come in when the coffee industry is faced with a number of challenges – coffee wilt disease, low soil fertility, old age of coffee trees, prices volatility – but basing on their individual expertise further improvements are expected. The minister was accompanied by the Minister of State for Agriculture Hon. Henry Bagire and the Permanent Secretary Mr. Vincent Rubarema In response, the Chairman of the Board, Eng. Fabian Tibeita, in his maiden speech thanked the Minister for the trust bestowed on them and promised to work closely with the ministry’s agencies and departments for the benefit of the ordinary farmer. On the need for planting material, he vowed to increase the availability of planting materials. The Board members include representatives from: Farmers (2), Processors (2), Exporters (2), MTTI (1), MoFPED (1), MAAIF (1), UCDA MD and the Chairman.

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Under development activities, with technical assistance from the University of Florida, organic coffee farmers in the districts of Sironko (115), Kapchorwa (67), Nebbi (50), and Luweero (45) were trained in production and certification requirements by the US National Organic Programme.

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Under the replanting initiative, over 450,000 seedlings were given out and planted by farmer groups in the districts of Bushenyi, Kanungu, Rukungiri, Ntungamo, Masaka, Mpigi, Page 7

UCDA Monthly Report: May 2009

Mukono, Wakiso, Kiboga, Mubende, Mityana, Iganga, Mayuge and Kapchorwa. •

A farmer group from Kasese, Ms Change Agents, was facilitated by UCDA to sell their coffee, 20 m/tonne, to the final consumers in the USA. The farmers had earlier on been trained in good handling practices that include grading and cupping to ensure good quality. This act brought a lot of excitement to farmers who vowed to look after their coffee well for better pay.

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Establishment of Technology Development Sites in Mid-Northern Uganda continued and 17 of them in Acholi and 5 in Lango were planted with coffee, PHIA banana suckers and Albizia shade trees. 36,000 coffee plantlets were planted by technically trained contact farmers in Mid Northern Uganda and 24,000 will follow before the end of the rains

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UCDA participated in the 6th Eastern Regional Trade Fair held in Mbale stadium from May 28, 2009; the UCDA stand showcased good agronomical practices and techniques to mitigate the incidence of pests and diseases in Arabica coffee. Farmers were able to taste their own coffee which was brewed and served to them throughout the event.

8.0 OUTLOOK FOR JUNE 2009 Coffee exports in the month of June are projected at to reach 270,000 bags (16,200 tonnes) as coffee harvesting and marketing of the main season south of the equator intensifies. Meanwhile, farmers are advised to take advantage of the ongoing rains to plant coffee under the replanting programme; and to improve on their husbandry practices for better returns. 9.0CALENDAR OF EVENTS

 UCDA, USAID-LEAD and the Coffee Quality Institute (CQI) are to hold a Q-Graders’ and Star Cuppers’ training course that is to run for the period June 08 – 11, 2009 at UCDA premises, Lugogo Showground. The training is envisaged to impart quality improvement knowledge to participants, which will result in a rise in the volume of coffee sold to the specialty market. Through this training, participants shall be able to taste Robusta samples from all over the world.  Uganda is to participate in the Specialty Coffee Association of Europe (SCAE) under the theme ‘Wonderful Coffee’ due to take place June 26 – 28, 2009 in Cologne, Germany. [email protected]

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UCDA Monthly Report: May 2009