Uganda's coffee exports to Turkey surge 2,200%

Recent fluctuations in Ugandan coffee prices have painted a dynamic market landscape, with Arabica hitting a 2-1/2 week low due to the weakening Brazilian Real against the dollar, while Robusta coffee made a rebound. Amidst this backdrop, Uganda's coffee industry has witnessed a phenomenal growth in exports to Turkey, soaring by an impressive 2,200% from 2019 to 2024. To delve deeper into the reasons behind this remarkable surge and its implications, CNBC Africa engaged in a conversation with Robert Kabushenga, a Coffee Farmer at Rugyeyo Farm in Kampala, Uganda. Robert Kabushenga shed some light on the challenges faced by coffee producers globally, particularly in Brazil due to increasing temperatures affecting Arabica production. He predicted that Arabica prices would continue to rise due to production challenges and growing demand, making it necessary for coffee enthusiasts to prepare for higher prices. On the other hand, the increase in demand for Robusta coffee was highlighted, driven by the affordability compared to Arabica and the quality that Ugandan Robusta offers as a ready-to-drink option directly to consumers. Kabushenga pointed out that Vietnam, the largest Robusta producer, faced productivity issues, which could lead to a shortage, creating an opportunity for Uganda to ramp up its Robusta production. The conversation also touched on the factors that could impact Uganda's coffee performance on the stock exchange and internationally. Kabushenga highlighted political interference as a threat to coffee production in Uganda but expressed optimism in the growing interest among farmers to increase production levels. He stressed the importance of access to affordable financing and the need for infrastructure improvements to facilitate exports. The success story of Uganda's coffee exports to Turkey was seen as an opportunity to explore alternative markets and reduce dependency on multinational buyers. Kabushenga emphasized the need for strategic initiatives to tap into emerging markets directly and improve pricing dynamics by engaging with consumers. He noted that bypassing international middlemen could lead to better prices for farmers. When discussing Uganda's domestic coffee supply meeting international demand, Kabushenga stressed the need for improved production processes, standardization, logistical capacity, and access to resources like water and fertilizers. He highlighted the vast untapped land in Uganda that could boost production capacity if utilized effectively. On the policy front, Kabushenga emphasized the importance of policies that support production processes and provide patient capital for farmers to scale up operations effectively. He noted the critical role of the value chain in ensuring farmers' success and suggested interventions that could enhance productivity and profitability. In terms of financial impact, Kabushenga projected a potential revenue increase from the current $800 million annually to $900-$1 billion with the surge in coffee exports to Turkey. He emphasized that the direct sale of coffee to buyers benefited farmers by ensuring increased prices and volumes translated into substantial earnings. Overall, the surge in Uganda's coffee exports to Turkey reflects the potential for the country to diversify its markets, increase revenue for coffee farmers, and contribute significantly to the global coffee trade.