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An e-publication of Uganda Coffee Federation V O L ! | I S S U E 1 | F E B R U A R Y 2 0 1 7

INDIAN GOVERNMENT ISSUES AN ULTIMATUM ON USE OF METHYL BROMIDE

The Government of India through its Ministry of Agriculture and

Farmers Welfare issued an ultimatum on 2nd January 2017 on the use of Methyl Bromide (MBR) for fumigation of agricultural commodities destined for India. This means that any agricultural commodity entering India without MBR fumigation from the loading port will be rejected by the Plant Quarantine (PQ) department of India. This ultimatum takes effect from 1st April 2017.

Methyl bromide was widely used as a fumigant of choice globally owing to its extreme efficacy in soil treatment, as a phytosanitary or quarantine treatment to control pests as a treatment of ships and freight containers. However, in 1992, it was listed as an Ozone Depleting Substance (ODS) under the Montreal Protocol for the protection of the ozone layer. Aside from its ozone depleting potential, it is highly toxic to humans, and labeled as a carcinogen. Phase-out schedules were agreed as 1 January 2005 for developed countries and 1 January 2015 for developing

countries with provision for critical use exemptions. Uganda ratified the Montreal Protocol in 1987 and the London amendment in 1994.

Owing to this ultimatum, some countries like Tanzania, Brazil, Ukraine, Malaysia, Costa Rica and Togo have agreed to start using MBR.

Uganda’s coffee exports to India between 2013/14 and 2015/16 have been ranging between 96,300 bags and 131,500bags valued at about USD$ 8Million, giving a 2.8% to 4% of our coffee exports. This makes India the 4th biggest buyer of Uganda coffee from EU, Sudan and USA.

UCF is in talks with UCDA to see how this impasse can be resolved or else this market may cease to exist.

On 22nd February the Coffee stakeholders converged to discuss how the world

coffee research was carried out. The major discussant was Mr. Tim Schilling, CEO World Coffee Research (WCR) Institute. WCR is driven by producers, and is working with multiple research institutions, collaborating and sharing research globally, with the intention of creating a variety catalogue for farmers, opportunity for the development of a global monitoring system to capture climate change impact and pest and disease trends and potentially create early warning systems. All these are geared towards getting the research findings into the hands of the farmers.

WCR is currently using Ethiopian ‘parents’ combined with central American varieties which they are using to create ‘super-parents.’ Presently, WCR is testing 45 varieties in Rwanda and in dialogue now with GoU for Uganda trials. WCR has permission to use Batian; a protected variety in Uganda and Rwanda but presently working with this in Kenya. While the sector accepts new varieties are important as a long-term strategy, the coffee industry needs to focus on short term priorities like GAPs – training/ increasing adoption, crop nutrition, rehabilitating existing coffee gardens alongside the

replanting programme through mass stumping, pruning and spraying; . There was also a call for a national soil survey for proper administration of fertilizer regimes. Participants called on Operation Wealth Creation to be more involved in these activities if the sector is to realize significant changes. UCDA on its part informed stakeholders that the Coffee law is under revision and pertinent issues like the Coffee Fund for supporting NaCORI has been incorporated adding that the Coffee Lab will take place very soon to discuss the ways of increasing coffee production and thereby achieving vision 2020.

COFFEE STAKEHOLDERS MEET TO DISCUSS THE GLOBAL RESEARCH

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COFFEE SUB-SECTOR TO BENEFIT FROM AGRICULTURAL CLUSTER DEVELOPMENT PROJECTThe Ministry of Agriculture, Animal industry and Fisheries with support from the World Bank is implementing a 5year Agricultural Cluster Development Project (ACDP) aimed at increasing production and productivity, and marketable volumes of selected commodities that include: maize, beans, rice, cassava and coffee by providing farmers with subsidized agro-inputs through the use of an electronic voucher (E-Voucher) system.

The USD$248 Million project will be piloted in 5 districts of Amuru for rice, Iganga for maize, Nebbi for cassava, Ntungamo for beans and Kalungu for coffee.

This is a cost sharing project and farmers are expected to make their contribution through paying a certain percentage for their inputs and also improve on their post-harvest handling and market infrastructure as the government makes the top-up.

Source: Bank of Uganda Source: UCDA

LOCAL COFFEE OUTLOOKMost of the coffee exporters are in recess now having had a three and half months busy schedule running from mid-October to January. Many of them attest to have acquired extra space outside their premises to accommodate the extra volumes of coffee that was coming through.

According to the UCDA Statistics, the cumulative exports for this coffee year for the last 4 months ( Oct – Jan) is a total of 1,446,295 bags compared to 1,149,275bags exported in the same period in 2015/16; an increase of 25.84%.

Presently, activities have gone down except for some Drugars that have started flowing in from Kasese Region. This is going for a price range of UGX 6,000 to 6,500. The out turn is still low but is expected to increase as the season progresses. The little FAQ that is coming in is priced in the range of UGX 5,000 to 5,500.

The exchange rates are still in the mark beyond 3500 and this is embedded into the prices offered to farmer. While a depreciating shilling may increase the price given to the farmer for a kilo of coffee, the other needs may erode the benefits accruing therefrom the bulk of which are imported. This does not only apply to the farmer but also the exporter with significant direct costs and overheads.

GLOBAL PERSPECTIVEAccording to International Coffee Organisation (ICO), exports for the first quarter of coffee year 2016/17 were 8.3% higher than last year at 29.8 million bags. Arabica production is potentially set for a record 93.5 million bags with bumper crops from Colombia and Honduras while prospects for Robusta are less because of the lower crop expected from most major origins with exports from the two largest origins, Vietnam and Indonesia, estimated up by 16.1% and 21.2% respectively. There was a pronounced price increase in Robusta which was attributed to supply shortage stemming from a small conilon crop in Brazil and reduced crop forecasts for Vietnam and Indonesia which led roasters increasingly substitute other Robusta origins or lower grade Arabica in blends.

Nicaragua’s government has approved an increase in the nation’s Robusta crop after two consecutive years of drought. Nicaragua regulates the amount of Robusta grown in the country in an effort to preserve its reputation as a producer of Arabica. Robusta currently accounts for about 2% of its export.

The USD$248 Million project will be piloted in 5 districts of Amuru for rice, Iganga for maize, Nebbi for cassava, Ntungamo for beans and Kalungu for coffee

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Published by:Uganda Coffee Federation2nd Floor, Coffee HousePlot 35, Jinja RoadTel: 0414-343692 / 77

Email: ucf@ugandacoffeetrade.comwww.ugandacoffeefederation.org

The Coffee Yearbook 2015/16 Edition is out and under distribution. Grab yourself a copy from the UCF office at Coffee House. Special Thanks to the Advertisers and Contributors

• We want to welcome Intergrano SL as new member to the UCF Family. Intergrano SL is a Spanish Company with over 30 years dedicated exclusively to Green Coffee imports for Spanish and Portuguese markets, leader at HORECA and also a pioneer at the Specialty Coffee Imports. It has offices in the major producing countries of Vietnam, India, Brazil, Honduras, Ethiopia Guatemala and Columbia

• 13 March - 17 March 2017 - 119th Session of the ICO; London, UK

• 31 March 2017 – UCDA @25 Celebrations

• 31 March 2017 – Annual Stakeholders Meeting

• 20 April – 23 April 2017 – Global Specialty Coffee Expo (SCAA) Washington State Convention Centre, Washington.

PINBOARD!!!!