Written by
Faridah Nalugya Kulumba
Africa-Press – Uganda. In September 2021, Uganda announced its decision to withdraw from the International Coffee Treaty, with effect from February 2022, raising market concern from stakeholders.
The decision to withdraw was announced by the managing director of the Uganda Coffee Development Authority (UCDA) Dr Emannuel Lyamukene Niyibigira to the International Coffee Organisation (ICO) on September 10, Daily Monitor reported.
The announcement clarified that the government of Uganda will not join the extension of the International Coffee Agreement (ICA) 2007 beyond February 1, 2022, and requested the ICO Secretariate to circulate this communication to all members of the organisation.
ICA treaty
The International Coffee Agreement (ICA) is an international commodity agreement between coffee producing countries and consuming countries, which was first signed in 1962, aimed at maintaining exporting countries quotas and keeping coffee price high and stable in the market, mainly using export quotas to steer price.
The agreement is controlled by the International Coffee Organisation, which represents all major coffee producing countries and most consuming countries.
The current 2007 agreement has 42 exporting and 7 importing members, but the European Union represents all its member states as one member.
Reasons for the withdrawal
The reasons for the withdrawal were not revealed, but sources within and close to Uganda Coffee Development Authority said the move was made without the approval of the board and government.
What pulling out means to coffee stakeholders
According to the president of National Organization of Trade Unions Uganda Mr Usher Wilson Uwere, the move is not only scandalous but will also make local coffee lose market.
Adding that ICO serves as the forum for intergovernmental consultations and facilitates international trade through promotion of transparency and promotes sustainable coffee economy for the benefit of all coffee stakeholders.
Access to a range of services, data, knowledge, strategic, commercial and development partnerships among producing and importing countries as well as with development organisations and financial institutions are also key factors that members value as part of their participation and integration in the International Coffee Agreement.
Uganda exported a record 6.08 million bags in 2020-2021, the highest total for 12 months in 30 years as exports value reached a record-high of $559m compared to 5.11m bgs worth $496m in FY 1920.
According to Uganda Coffee Development Authority, the biggest consumer of Ugandan coffee was Italy with a market share of 34.5% followed by Germany 13.11% (14.36%), India 9.5% (5.00%), Sudan 7.81% (4.04%) and Algeria 6,28% (5.80%), Europe remained the main destination for Uganda’s coffee with a 61% import shares, while Coffee exports to Africa announced to 112,416 bags, a market share of 18%.
