Optimism as Rwanda eyes India for coffee exports

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Optimism as Rwanda eyes India for coffee exports

This will be another relief for the country’s exports receipts that are now bending low for imports receipts which has widened the trade deficit thus prompting the government to look further to close the gap.

Rwanda’s trade deficit surged to trade deficit widened to USD 898.6 million in the  first half of 2014 from USD 765.4 million in the same period last year increasing by 17.4% with  export cover of imports falling   to 24.6% from 27.5% in the same period under review.

According to Central Bank statistics, Coffee exports fetched$12.79 million in the first half of 2014up from $20.2 million in the same period under review, a drastic drop, for the country’s leading foreign exchange earner.

About 70% of the country’s export revenues come from mainly coffee and tea. Women dominate farming with 53% involved in working in the fields.

This means that tapping into Asia’s third largest economy that has witnessed growth in the consumption of coffee will ultimately give Rwanda’s fine coffee a green light to compete favourably.

India has witnessed a growth in demand for higher Arabica coffee to up to 1.2 million bags by 2012 and still rising while consumption also grew over 7,000 tons a year in 2010with 90 percent consumed by   households and restaurants.

“This is an opportunity Rwanda as a country should tap into to boost its coffee and tea exports,” said Clarence Fernandes, a trade relations expert and representative of Rwanda’s trade promotion board- Rwanda Development Board-RDB in Mumbai.

Experts are also optimistic that after a success in  penetration of the China market, India with  its production of  low Robusta beans that were estimated at   4.7 million 60-kg bags of coffee a year  by 2010,  would be a best  market for Rwanda’s highly fined  bourbon’ type of Arabica coffees.

Farmers are optimistic that such a market will help   increase the gate prices of their coffee, which they have complained is not matching with their input costs thus making coffee farming a hectic venture for farmers.

“We are hopeful that this will bring up the price we are earning from our coffee,” said Frigence Nzeyimana, a coffee farmer

The farm gate prices, a price given to coffee farmers fluctuated around Rwf 180 to Rwf 300 for the past two years.

Need to increase production

But as market increases, experts say the government   should look at the need to increase production as well as quality of coffee to satisfy the growing demand from the created markets.

For example, according to   National  Agricultural Export Promotion Board-NAEB, the production ranges from 267, 000 to 420,000 bags per year (16 000 MT to 21000MT) with   that total area  for  coffee farming  standing at  42,000 hectares, a production that  need to  be  boosted.

 

About the author

Olive Ndaka is the Junior Editor for RwandaEye. An investor and young entrepreneur, she is a quick learner and has contributed many articles for RwandaEye in Kinyarwanda.

More posts by | Visit the site of Ndaka

 

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