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- The recent COVID-19 pandemic has come at an overwhelming cost to the Ugandan economy. However, Uganda’s coffee sector appears to have been relatively resilient to the recent crisis to date.
- As a ‘necessity’ product based on futures contracts, commercial coffee is likely to be less subject to huge demand shocks in the short run. At the same time, the onset of the crisis has coincided with higher than usual yields from the latest harvest and adaptation by the coffee authority (Uganda Coffee Development Agency, UCDA) has ensured continued (if slower) flow of exports. Significant increases of Robusta coffee seemed to have boosted supply, while rising and relatively stable prices and demand for Arabica coffee have ensured stable demand for higher value exports.
- Exporters still face significant additional costs and delays associated with transporting goods to and across borders as a result of stringent testing measures at the Kenya-Uganda border crossing.
- It is crucial for policymakers to proactively address supply side constraints while ensuring farmers do not divest from quality coffee. Market and quality control can help exporters to diversify markets and take advantage of reopening of restaurants and cafes globally to promote Arabica coffee, which attracts higher prices and greater potential for value addition.