Uganda Arabica coffee prices skyrocket

Friday, 1st April,2011

THE price of premium parchment Arabica coffee in Bugisu has hit an all-time high of sh8,500 per kilogramme.

Premium parchment coffee is a grade of clean coffee beans that is barely three years in the market, but has attracted high demand from local export firms for its conformity to international standards.

The price rose from sh6,000 in January to sh6,500 in February, before leaping to sh8,500 in March.

The brand sold at sh5,000 the same period last year.

Unlike ordinary parchment, premium parchment is derived from ripe coffee cherries that are immersed in water to float out the damaged cherries before pulping. Parchment is dried either on wire meshes, papyrus mats or tarpaulins for cleanliness. Ordinary parchment is trading at sh6,000, up from sh5,000.

However, the price increment has come at the peak of the dry season (January to July) when farmers are harvesting remains of cherries from last year’s poor yields.

This means high prices will have little impact on earnings of the farmers due to the scarcity of the product.

James Kissa, a coffee farmer in Sironko district, explained that despite the price rise, farmers were grappling with the impact of last year’s low harvests.

“It’s of no use to us. If we had bumper harvests, we would be jubilating.

“But we do not have any stock to sell as the heavy rains and leaf rust lowered the yields. We shall only benefit if the prices stay up until next season because we hope to get better yields. We had enough sunshine for the last four months,” Kissa said.

However, Moses Khabala, from Busano sub-county in Mbale district, said the rise had boosted coffee trade.

Khabala observed that some farmers stocked the product last season in anticipation of the rise in prices.

“I bought 15 bags of premium parchment at sh4,000 last season. I sold them recently at sh7,800, nearly twice the cost. Lately, we buy parchment at sh6,000 and sell it to mainstream firms at sh7,800. We are having a field day,” Khabala said.

The Uganda Coffee Development Authority (UCDA) had earlier predicted the prices to rise further in March due to low coffee yields in the main season that starts in July because of the prolonged drought.

The drought, UCDA added, had stressed the coffee trees, shed off green cherries and was likely to delay flowering.

Umar Maleh, the communications officer of Kyagalanyi Coffee, a local coffee export firm, attributed the price surge to the emergence of new companies dealing in Arabica coffee and increased local consumption of the beverage.

He pointed out that UGA Coffee and Kawa Com, that previously dealt in Robusta coffee, had joined the Arabica coffee trade.

“Companies are realising the benefits of trading in Arabica coffee. As more step in to the trade, competition for the scarce parchment is increasing,” Maleh said.

By Daniel Edyegu: The New Vision Newspaper