Regulatory environment
Coffee in Uganda is regulated by Uganda Coffee Development Authority (UCDA) with the mandate to oversee the coffee subsector. The authority works under the Ministry of Agriculture, Animal Industry and Fisheries (MAAIF) and has a Board of Directors representing all coffee sector participants at the different levels of the coffee value chain as well as government (private-public-partnership-PPP). UCDA levies a one percent local tax on all marketed coffee. UCDA fulfils its mandate of promoting and overseeing the development of the entire coffee industry through: supporting research; promoting production; controlling the quality and improving the marketing of coffee in order to optimize foreign exchange earnings for the country and increase farmer’s earnings. The Coffee production, processing and marketing policies are implemented by UCDA on behalf of the Government of Uganda (GOU).
The National Coffee Policy of 2013
The key pillars of the policy are increased productivity; expansion of the coffee planting area; and the improvement of the coffee business environment. The policy also aims at diversification of markets, promotion of sustainable production systems, value addition, increasing domestic consumption, and improvement of research capacity.
Coffee 2020 strategy
The government of Uganda desires to accelerate coffee production from 3 million 60kg bags to 20 million 60kg bags by 2020. Uganda Coffee Development Authority (UCDA) and Office of the Prime Minister (OPM) service delivery unit are in the process of developing a Coffee 2020 Strategy to implement the government directive. To realize this target UCDA has planned to generate, distribute and plant 300 million seedlings in the FY 2016/17 with 97 million seedlings in September to November 2016 and 203 million seedlings in March to May 2017 planting windows.
The overall strategy is to increase the production and productivity of coffee trees. This will be attained through provision of seedlings at household and farm levels as well as rejuvenating old plantations.
The specific objectives of the strategy are as follows;
- To plant 900 million coffee seedlings in the next three years spread across 98 coffee growing districts in Uganda thereby increasing coffee production by 12.5 million 60kg bags and the area under production by 535,011 hectares by 2020
- To attain an export level of at least (additional) 20 million 60kg bags valued at US$ 2,627 million by 2020
- To improve incomes of coffee growing households in Uganda by US$ 1,970 million
Source: New vision
Coffee sub-sector performance
Coffee is one of the most important cash crops in Uganda playing a major role in the livelihoods of many people in the country accounting for about 20–30% of foreign exchange earnings. In Uganda about 500,000 households depend on coffee production and the country has main two coffees grown that are Arabica which accounts for 15% and Robusta coffee which accounts for 85% The coffee industry employs over 3.5 million families through coffee-related activities (UCDA, 2012).
Coffee exports for the FY 2014/15 amounted to 3,237,924 60-Kilogram bags worth US$ 402.903 million, in comparison to 3,651,769 60-Kilogram bags worth US$ 403.560 million in FY 2013/14. This reflected a 0.2% decrease in the export earnings which was highly due to the drought experienced in the second season 2014, reducing the volumes available for export. Uganda’s coffee production in the marketing year (MY) 2016/2017 reduced to 3.7 million bags from a record 4.5 million bags production in the MY 2015/2016 due to the effects of biennial bearing cycle.
Also UCDA raised 5.8 million coffee seedlings; (4 Million Robusta, 1.8 Million Arabica) and procured 4,200 liters of Chemicals and 12 sets of protective equipment for Black Coffee Twig Borer (BCTB) spraying and 30 motorized pumps to control pests/diseases in coffee. Source: (national budget framework paper FYs 2016/17 – 2020/21)
Coffee growing areas
Robusta is mainly grown in central region mainly in the districts of Luwero, Masaka, Mityana, Kayuga, Rakai, Mubende and Kiboga. The growing of Robusta coffee has now spread all over Uganda.
Arabica coffee is mainly grown around Mountain Elgon and in the districts of Bushenyi, Ntungamo, Mbera, Kasese, Rukungiri and Mbarara. Others areas growing Arabica coffee include West Nile and Lira,
Coffee Research
Coffee research in Uganda is carried out by the Coffee Research Centre (COREC), a programme under National Crops Resources Research Institute (NaCRRI) of the National Agricultural Research Organization (NARO). Coffee research is heavily constrained by insufficient funding, inadequate infrastructure and facilities, and is greatly understaffed.
Production
Uganda’s coffee production in the marketing year (MY) 2016/2017 reduced to 3.7 million bags from a record 4.5 million bags production in the MY 2015/2016 due to the effects of biennial bearing cycle.
Market and marketing (Coffee global market)
Coffee marketing in Uganda is fully liberalized, with vibrant producer organizations. Most international coffee traders are represented in the country by locally incorporated companies. Robusta coffees are processed at the soluble coffee factory in Bukoba in Tanzania, and packaged in Kampala for distribution in the local and regional markets. Arabica coffees are processed for domestic sale at the twelve registered coffee roasting plants. The major consumers of coffee are mainly from the developed economies including USA, EU and Japan. Coffee is the second major traded commodity to oil and thus plays a vital role in the balance of trade between developed and developing countries. Uganda’s coffee is mainly exported to UK, Netherlands, Spain, Italy, Denmark, Norway, Sudan, Singapore and China.
Leading destinations for Uganda Coffee Exports
| Export Destination | 2012/ 2013 | 2013/2014 | 2014/2015 | |||
| Quantity (T) | % | Quantity (T) | % | Quantity (T) | % | |
| Italy | 27,047 | 19% | 37,750 | 23% | 42,198 | 26% |
| Germany | 39,004 | 27% | 38,660 | 23% | 29,585 | 19% |
| Belgium | 16,388 | 11% | 18,611 | 11% | 16,944 | 11% |
| Spain | 11,078 | 8% | 10,122 | 6% | 10,180 | 6% |
| United States | 8,363 | 6% | 8,138 | 5% | 9,166 | 6% |
| France | 5,260 | 4% | 8,113 | 5% | 7,544 | 5% |
| India | 5,384 | 4% | 6,752 | 4% | 7,608 | 5% |
| Portugal | 5,213 | 4% | 5,985 | 4% | 5,676 | 4% |
| South Korea | 682 | 0% | 5,497 | 3% | 3,587 | 2% |
| Morocco | 4,742 | 3% | 5,251 | 3% | 3,464 | 2% |
Source: GTA, UCDA
Uganda’s Coffee competitive advantage
- Availability of two coffee products that is Robusta and Arabica
- Uganda is unique country in the region with two main seasons characterized by rain throughout the year
- Uganda coffee has very good intrinsic quality due to high altitude and soils
- The economic stability of the country
Investment opportunities in the coffee subsector
- Production of quality seedlings
- Coffee processing for export
- Local coffee roasting
- Capacity building for the local coffee farmers