The National Agriculture Export Development Board of Rwanda (NAEB) has taken steps to install confidence in the country’s coffee industry that an increase in crop quality will help protect farmers and exporters against the current – and expected – drop in prices on the global markets.
As we have noted previously on World Coffee Press, favourable weather conditions in key geographical areas has seen worldwide harvest levels rise, which has resulted in more supply than demand. As such, prices have tumbled.
However the NAEB hope to offset this downturn by focusing on value, saying that if their produce improves then they’ll be able to command a much higher price.
“Buyers like quality coffee, and will pay handsomely regardless of whether there is an increase in supply,” said Celestin Gatarayiha, the head of the NAEB’s coffee division, pointing out that some Rwandan grown coffee is extremely sought after.
However, in a rather contradictory statement, the NAEB official also admitted that Rwandan farmers may not even feel the effect of the market’s downturn.
“Rwanda sells coffee through negotiated contracts with international stakeholders,” he said.
This statement was echoed by many within the local trade who were quick to dismiss fears about a loss of income.
“When you sign a contract, price declines do not affect you,” said Jeremie Iyakaremye, who works for the export company Unguka Muhinzi.
Other local experts pointed out that the majority of coffee grown in Rwanda isn’t shipped at this time of year either, and current crops are therefore well protected from the current financial blip. But some did raise concerns that if prices continued on their downward trend, many farmers could find themselves in trouble later on this year.
Rwanda exported nearly 16,000 tonnes of coffee last year, bringing in roughly $60 million, an increase of $5 million when compared to the previous twelve months.