AFRICA’S coffee exports may rise as much as 10% a year over the next decade if the continent’s producers can tap growing demand from emerging markets including China, according to a unit of trader Sucafina SA.
India, Russia and the Middle East, where consumption and populations are also expanding, are potentially big export markets for African beans, Kailash Natani, managing director of Ugacof Ltd., one of Uganda’s main coffee shippers, said Wednesday in an interview in Nairobi.
“A 10% growth per year is possible for African coffee for five to 10 years if producers boost sales to emerging markets,” he said. “There is growing demand for coffee in these markets.”
Africa, which supplied a quarter of global beans in the 1970s, now accounts for 10% of coffee output, US Department of Agriculture data show. The continent’s farmers are being threatened by high production costs and smallholders need to become more efficient to survive, according to trader Olam International Ltd.
African countries are trying to boost output to raise export revenue and increase farmers’ earnings. Uganda, the continent’s biggest exporter, plans to increase exports by about 75% to six million 60-kilogram bags in 2020, the nation’s industry regulator has said.
Tanzania’s coffee output may rise 50% to 62,000 metric tonnes in the 12 months through June from a year earlier while Kenya plans to increase output by 18% to 45,000 tonnes in the year through September 2016, according to the two countries’ industry regulators.
Uganda already has an agreement to export beans to China, Natani said. Better promotion of local coffee in African producing nations and increased consumption in Algeria, Morocco, Sudan and SouthAfrica may also boost demand, he said. (Bloomberg)