News in Brief:
– Uganda’s coffee industry, a major source of income, faces a challenge as just 10 firms control 70% of exports, raising concerns about competition and fair prices for farmers.
– The UCDA recommends empowering smaller exporters through finance, training, and infrastructure improvements to create a more diverse and competitive market.
Uganda’s booming coffee industry, a major source of income for the country, is facing a potential challenge: a lack of competition in exports. A recent report by the Uganda Coffee Development Authority (UCDA) shows that a mere 10 companies handle a staggering 70% of the nation’s coffee exports.
This concentration of control raises concerns for Ugandan coffee farmers, who may not be receiving the best prices for their product due to limited competition among buyers. The UCDA report therefore stresses the need for initiatives that empower smaller and medium-sized coffee exporters to participate more effectively in the international market.
Accordingly, the current situation, where 61 registered coffee exporters contribute less than 1% each to the total export volume, suggests limited opportunities for farmers to negotiate prices or find alternative buyers. It is this lack of competition that analysts fear could potentially lead to a scenario where a small group of dominant firms dictate market prices, potentially impacting Ugandan coffee farmers’ profits.
However, in a bid to address this concern, the UCDA report recommends a multi-pronged approach. Programs aimed at strengthening smaller and medium-sized exporters were highlighted as crucial. These programs could provide access to vital resources such as finance and training in areas like marketing, quality control, and international trade practices.
Additionally, investments in infrastructure development, particularly for transportation and logistics within Uganda, could streamline the export process for smaller players, making them more competitive on the global market.
