E.2. Regional Supply and Demand in 2019/20 E.2.1. Africa’s exports rise
Since 1990/91, regional consumption has grown at an average annual rate of 3.2% from 4.9 million bags in 1990/91 to an estimated 11.67 million bags in 2019/20. Africa’s consumption accounted for 7% of global consumption in 2019/20, which is 1.6 percentage points higher than its share in 1990/91. The five largest consuming countries in the region are Ethiopia, Algeria, Morocco, South Africa and Egypt and account for nearly 70% of regional consumption. As consumption remains relatively low compared to other regions, much of the coffee produced in Africa is exported. Exports from the region in the first ten months of the coffee year reached 11.65 million bags, 5.1% higher than the same period in 2018/19. Trading under the African Continental Free Trade Agreement (AfCFTA) was to begin on 1 July 2020, but covid-19 delayed this deadline to January 2021. AfCFTA was established to create a single continental market for goods and services as well as a customs union with free movement of capital and business travellers. AfCFTA
African Continental Free Trade Agreement (AfCFTA), established to create a single continental market for goods and services, is expected to further boost trade between the African countries that have ratified this agreement.
Ethiopia is the region’s largest consumer and producer. After a decrease of 19% to 5.56 million bags in 2010/11, production in Ethiopia has grown steadily and is estimated to increase by 2.1% to 7.7 million bags in 2019/20, due to beneficial weather and adequate rain. Around half of Ethiopia’s production is consumed internally and local consumption is estimated to rise by 0.4% to 3.73 million bags in 2019/20. Ethiopia is the second largest exporter in the region and its shipments are primarily green coffee. However, in 2019, the country enacted a new marketing and export policy to allow direct exports by smallholders and encourage vertical integration to improve traceability. Exports from October 2019 to July 2020 reached 3.42 million bags, 14% higher than in 2018/19. Ethiopia’s main export destinations are Germany, Saudi Arabia, Japan, the USA and Belgium. Uganda is the second largest producer and largest exporter in Africa. After declining by 7.4% to 4.6 million bags in 2017/18, Uganda’s production grew by 2.3% to 4.7 million bags in 2018/19 and is estimated to increase by 4.2% to 4.9 million bags in 2019/20 due to good weather and higher yields from new trees coming into production. As around 5% of its harvest is consumed domestically, Uganda exports almost all of its coffee. In 2019/20, total shipments are projected to reach 5.2 million bags. Uganda’s exports consist of green Arabica and Robusta. Uganda’s share of Arabica shipments has grown over time from 5% in 1986/87 to a high of 26% in 2017/18. Arabica’s share of total exports in 2019/20 is estimated to decrease to 20% as result of a larger Robusta harvest. The main destinations in 2019/20 were Italy, Sudan, Germany, India and Spain, which accounted for around 75% of total exports. In August 2020, the Parliament of Uganda passed the 2018 National Coffee Bill, which replaces the Uganda Coffee Authority Act, Cap. 325 enacted in 1991. Provisions of the bill include regulation for the entire national coffee value chain rather than just off-farm activities, requiring the Uganda Coffee Development Authority to establish a voluntary coffee auction system, establishing the UCDA as responsible for coffee extension services, and allowing for UCDA to register and promote stakeholders across the national coffee value chain into a national registry.49 During the quota period, annual production in Côte d’Ivoire averaged 3.76 million bags. Output fell to an average of 3.45 million bags in the 1990s and then declined significantly to an annual average of 2.2 million bags following civil wars in the early 2000s and 2010/11 as well as the international coffee price crisis. After falling to 837,000 bags in 2010/11, coffee production has grown by an annual average of 8.4% to 1.47 million bags in 2017/18. Output increased by 66.2% in 2018/19, reaching 2.45 million bags, but is expected to decline by 10.2% to 2.2 million bags in 2019/20.
See https://www.un.org/africarenewal/magazine/august-2020/arz/afcftasecretariat-commissioned-accra-free-trade-set-begin-january-2021. 49 See https://ugandacoffee.go.ug/sites/default/files/Resource_center/National %20Coffee%20Bill%202018.pdf and https://dailycoffeenews.com/2020/08/ 10/ugandan-parliament-approves-coffee-regulations-that-reach-farm-level/. 48
See https://www.fitchratings.com/research/sovereigns/locusts-create-additionaldownside-risk-for-east-african-sovereigns-11-06-2020. 47 See http://www.fao.org/ag/locusts/common/ecg/562/en/DL503e.pdf 46
THE VALUE OF COFFEE
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Part III: Section E
African coffee production peaked at 21.55 million bags in 1980/81, and averaged 19.69 million bags over the rest of the decade before falling to 16.43 million bags in 1990/91 just after the end of the quota system when several national coffee markets were liberalised. Regional output continued to drop, averaging 16.06 million bags during the 1990s. Many farmers turned to other more remunerative crops, particularly during periods of low prices, and regional output reached a low of 13.91 million bags in 2005/06. Since then, several governments have strengthened national policies to provide support to their coffee sectors. The measures taken include guaranteeing a minimum price, increasing agricultural extension services, or providing inputs, particularly for rehabilitating trees. Regional production grew at an average annual rate of 2% in the last ten years but is estimated to decline by 0.2% to 18.83 million bags in 2019/20. Swarms of locusts, particularly in East Africa,46 which first appeared in early 2020, pose a threat not just to coffee crops next year but also food security, leaving coffee farmers particularly vulnerable while coffee prices remain low. Affected countries have implemented control measures to mitigate the impact, but another outbreak in the autumn remains a concern.47
is expected to further boost trade between the African countries that have ratified this agreement.48
