African Coffee, new black gold of the continent

April 14th, 2010 in Business 73 views

The first agricultural commodity exchanged in the world with 4% of the world’s food products, coffee is the second raw material in terms of trade in the world, which comes after oil and before wheat.

In Africa, coffee plantations occupy a surface of about 3,4 millions hectares. The first coffee producer in Africa is Ivory Coast with 0,26 million tons, followed by Ethiopia and Uganda (with about 0,18 million tons). In African countries where coffee is produced, more than 8 million people work in the industry of coffee.

Coffee – another black gold

Sold for the price of gold in Western Countries, the Africain coffee is fighting an ongoing battle to be sold at a fair price even if the market is booming. In Kenia, for example, the level AA climbed up to 450 dollars for the bag of 50kg during the auction in Nairobi on 26th January against 421 dollars during the previous sales.

In Ivory Coast, the official statistics show the current state of the coffee exportation which reached 26 785 tons between the months of October and December 2009, i.e. 246% more regarding the same period of the previous year.

In Uganda, the second African coffee producer and the first producer of Robusta, pluviometry is favourable and the harvest should start in May. With some 3,4 million bags, the harvest is expected to rise by 11,5%.

The price of coffee should be increased

In this country, coffee importers and international roasters have started a process, which encourages the purchase of this product directly from the farmers. This has provoked a reaction by those who judge such practices as inequitable.

In Ethiopia, the American distributor of coffee, Starbucks, and the Ethiopian government came to an agreement that obliges Starbucks to mention a unique type of Ethiopian coffee on their label. The agreement finally ended a dispute between the two parties.

The Unitated States granted Ethiopia the right to benefit from the intellectual property of three different types of coffee (Sidamo, Harar and Yigacheffe), and by doing so, they also gave rights to the Ethiopian producers.

The luxury market increases coffee’s quality

The EAFCA, a non-profit regional association who regroups Uganda, Kenya, Tanzania, Rwanda, Burundi, Zambia, Zimbabwe, Malawi and South Africa estimates that the producers, generally victims of exploitation, improve their revenues by abandoning poor quality coffee for export.

For that, it is necessary to train the producers and give them necessary equipment so that they can guarantee quality. The Association of fine coffee producers of East Africa therefore concluded an agreement with the main international importers such as Starbucks, Neumann Group and 4C.

This contract obliges the signatories to respect a series of obligations which are meant to promote the coffee reputation of the region and its fine coffee producers. Furthermore, the producers would obtain an incentive price, which would allow them to improve their standard of life and reduce poverty and also accelerate the economic development.