Uganda gives coffee company exclusive rights to its crop
Lawmakers in Uganda, Africa’s biggest coffee exporter, are calling for the cancellation of a government deal that gives a single company exclusive rights to buy the country’s coffee and is seen as being unfair for local exporters.
The parliament’s committee on trade is to probe the “controversial” February agreement with Uganda Vinci Coffee Company Ltd. over the terms, the Kampala-based legislature said in a statement on its website, citing Speaker Anita Among.
The deal signed between the finance ministry and Uganda Vinci prohibits anybody from buying the country’s harvest until “this company gets the quota they want,” lawmaker Abed Bwanika said in the statement.
Uganda Vinci has the rights to determine the price of the commodity, he said, without indicating when the pact is to come into effect.
Under the agreement, which also exempts Uganda Vinci from all taxes, the company will create the first final product processing plant in the country worth $80 million, the finance ministry said yesterday.
The deal is seen a key part of the government’s efforts to more than double coffee production to 20 million bags annually by 2030.
“Uganda Vinci will pay for superior quality coffee beans at a premium price, which will be determined transparently and not lower than the price approved by Uganda Coffee Development Authority,” the finance ministry said in a tweet. Exports of green coffee will continue and will be determined by market forces, it said.
Coffee trade in Uganda is liberalised and farmers get about 80pc of the export price of the beans, according to the country’s coffee regulator.
The country exports the bulk of its crop mainly to countries such as Italy, Germany, the US and Spain and may produce as much as 9.1 million 60-kilogram bags in the year through September.