Country Report Uganda March 2011

Economic performance: Coffee exports are increasing

The authorities attribute the recent weak performance of exports mainly to poor coffee output caused by unfavourable weather conditions. However, the data show that the sluggishness is more evident in non-coffee exports, and the latest outlook for coffee is not especially bad. Cumulative exports of coffee for the first four months of the 2010/11 season (October-January) show a 6% fall in volume exports but a 24% increase in revenue due to good global prices. The International Coffee Organisation recorded the highest coffee prices since 1994, which moved above 200 cents/lb in February, and it believes that a combination of global production, rising global consumption and low stocks will be enough to hold prices firm in the short term. Uganda's higher quality and more expensive arabica exports continue to perform better than robusta. The Uganda Coffee Development Authority (UCDA) says that arabica has benefited from improved farming practices encouraged by attractive prices, whereas robusta-producing regions have suffered from prolonged periods of drought. The UCDA expects coffee exports to fall in February, although it believes that some traders are hoarding stocks, hoping to sell when prices have risen even higher.

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