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Exports slump as coffee crisis bites

Peter 25th Nov, 2024 Economy Pedson Mumbere
Exports slump as coffee crisis bites

PIONEER: Officials inspect the first batch of Hass avocado fruits being prepared for export to Europe. Diversification of exports is helping to reduce the focus on coffee. FILE PHOTO


A new report by the Ministry of Finance, Planning and Economic Development has indicated that Uganda’s export earnings dropped by UGX 410.4 billion in September.

According to the Performance of the Economy Monthly Report for October 2024, the decline was primarily due to a reduction in coffee exports during the same month.

The report revealed that export earnings reduced by 14.1% to US$ 682.69 million (UGX 2.505 trillion) in September 2024, down from US$ 794.52 million (UGX 2.915 trillion) in August 2024.

  • The report indicates that coffee export earnings declined by 34.7% to USD144.7 million in September 2024, from US$221.63 million the previous month. Despite a rise in global coffee prices, Uganda faced a drop in export volumes, primarily driven by lower yields in key coffee-growing regions such as Greater Masaka and the South-Western parts of the country.

Officials said the reduced export volumes were primarily due to lower coffee yields in the Greater Masaka and South-Western regions of Uganda, following the end of the main harvesting season.

The reduction in yields significantly impacted Uganda’s overall export performance in September 2024.

  • Despite the decline in coffee exports, Uganda’s export markets remained diverse, with significant exports to various regions around the world.

The Ministry said the Middle East emerged as the biggest destination for Uganda’s exports, accounting for 36.4% of total exports in September 2024.

Within the Middle East, the United Arab Emirates (UAE) stood out as the primary recipient, with the report stating that the UAE “accounted for 97.6 percent of Uganda’s exports to the region.

The report also revealed that Uganda continued to rely on regional markets for export growth, with the East African Community (EAC) and the European Union (EU) making up key portions of the export portfolio.

The EAC accounted for “28.6% of total exports and within the region, the Democratic Republic of the Congo, Kenya, and South Sudan were the largest markets, accounting for 34.7%, 24.8%, and 18.3% of the region’s exports, respectively.

  • The EU contributed 18.5% of Uganda’s total exports, with Italy and Germany emerging as the dominant markets, taking up 47.2% and 21.6%, respectively, of Uganda’s exports to the region.
  • While coffee remains Uganda's most significant agricultural export, the country's export portfolio is increasingly getting diversified. The Ministry’s report noted that Uganda has seen growing demand for products other than coffee, including mineral products, other agricultural commodities, and manufactured products. This diversification, according to the ministry has helped to cushion the impact of fluctuations in the coffee market and provides a buffer against risks associated with the volatility of a single export commodity.

Uganda’s export performance in September 2024 highlights both the challenges and opportunities facing the country’s economy.

While the decline in coffee exports has caused a dip in overall export revenues, the continued demand from diverse global markets provides optimism for the country’s long-term export strategy.

Going forward, the Ministry of Finance emphasizes that strengthening agricultural practices, diversifying markets, and improving yield sustainability would be crucial for Uganda to maintain steady export growth and resilience in its trade sector.

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