Some
Parts of Africa Are Struggling to Produce
By Nicholas Bariyo
June 1, 2014
KAMPALA, Uganda—At 7:30 one recent
morning, Patra Akello, a dentist, joined some workmates for a ritual once rare
here: a cup of coffee.
"It's my favorite daily
routine," says Dr. Akello, 28 years old.
Ugandans are tea drinkers, though
their country exports more coffee than any other in Africa. But times and
tastes are changing, and an increasing population of Africans who drink coffee,
rather than grow it, is rumbling the global market.
Dr. Akello gets her caffeine fix at
a shop operated by Good African Coffee (Ltd.), a Ugandan roaster and processor.
Five years ago, Good African became the first company here to market locally
roasted coffee. Since then, dozens of other swanky coffee shops and restaurants
have sprung up across Uganda.
Local consumption is still small,
but the growing demand from local drinkers adds to an already strained market.
Severe drought in Brazil has crimped supplies from the world's largest coffee
producer. Demand is up among big roasters in Europe and the U.S. Coffee prices
on global exchanges have rocketed.
The cost of arabica beans, sought
after for their mild taste, has increased more than 80% so far this year, while
the robusta grade is up about 27%, according to the ICE Futures U.S. exchange.
Buoyed by the rally, farm-gate
prices for coffee in countries such as Uganda, Burundi and Tanzania have risen
by an average of 30% since the start of the year. But antiquated farming
practices, and neglect spurred by years of volatile coffee prices, have left
many parts of Africa with lower capacity to produce. Whenever prices drop,
farmers abandon plantations, even uprooting their trees, only attempting to
boost output again when the market recovers.
"Every exporter is now looking
for more coffee beans," says Nelson Niwahebwa, the general manager of an
exporting company, Banyankole Kweterana Ltd., in Uganda's main robusta-growing
region. "It's not easy to even meet contractual obligations with our
existing clients."
Uganda historically produces robusta
beans, but the government has been encouraging planting of the more desirable
arabica variety. Arabica now accounts for 30% of production, up from around 15%
to 20% three years ago.
 |
|
Uganda,
traditionally a nation of tea drinkers, has seen dozens of coffee shops and
restaurants
spring up as locals acquire a taste for coffee. Rising consumption
is adding pressure on a region
that already is struggling to produce. Above,
Good African Coffee in Uganda. Jjumba Martin for
The Wall Street Journal
|
Last year, African countries
produced about 14.7 million 60-kilogram (132-pound) bags of coffee, a marginal
drop from the 14.8 million bags produced the previous year, according to
International Coffee Organization data. The largest producer, Ethiopia,
consumed most of its coffee, exporting 2.8 million bags of a total production
of 6.6 million. Uganda exported 3.58 million of the 3.8 million bags it
produced.
The proportion that is exported is
likely to shrink. With most countries on the continent registering a sustained
average economic growth of more than 6% in the past decade, an urban workforce
with a taste for coffee has been cropping up.
"It's an opportunity the
private sector can harness to transform the coffee industry," says Norman
Mutekanga, the business development manager at Uganda's state coffee body,
Uganda Coffee Development Authority.
In Uganda, annual coffee consumption
has quadrupled over the past five years, from less than 50,000 60-kilogram bags
to more than 200,000 bags, according to UCDA. In Ethiopia, local consumption
hit 3.1 million bags in 2013, up from 2.8 million bags in 2010.
Despite the surging demand, African
farmers, who largely rely on rain and basic farming methods, aren't able to
take advantage of the situation, according to the regional coffee body, East
African Fine Coffees Association.
Unable to rely on the erratic income
coffee produces, farmers have been switching to growing grains and cereals,
which produce a crop in a single season. A coffee tree takes three to five
years to mature. Angola, which accounted for an average of 5% of annual world
production until the mid-1970s, lost its place among sub-Saharan Africa's
leading producers after farmers abandoned the crop.
John Kyeyune has worked on his
five-acre coffee farm in central Uganda since the 1990s. But with coffee trees
as old as 40 years, Mr. Kyeyune says his harvests continue to drop. "I
used to harvest more than 100 bags, but in recent years, I count myself lucky
with 60 bags," says the 50-year old farmer.
Mr. Kyeyune's plight represents that
of millions of small farmers in the region, who produce the bulk of the coffee,
but are unable to rehabilitate and maintain farmlands, mainly due to lack of
capital.
While the Ugandan government has
been implementing a coffee-growing campaign, which includes planting new
high-yielding varieties and introducing coffee farming in new regions, the
initiatives are yet to trickle down to smaller landowners. As a result, the
country hasn't been able to meet a target of restoring output to at least 4
million bags.
In countries such as Rwanda, Burundi
and Tanzania, output has nearly halved as plantations suffer neglect.
---
Write to Nicholas Bariyo
at nicholas.bariyo@wsj.com
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