Middlemen Hit Hard By a Slump in Local Coffee Prices

2131 Views Mbale, Eastern Region, Uganda

In short
Middlemen who hoarded Arabica coffee from Mt. Elgon region are now selling off their homes to service bank loans due to a slump in local coffee prices.

Middlemen who hoarded Arabica coffee from Mt. Elgon region are now selling off their homes to service bank loans due to a slump in local coffee prices.

Several middlemen and farmers, who had hoarded tons of coffee with the hope of selling it at a much higher price than the farm gate market price, are now stuck with the stock following an all time slump in the price.

Currently Bugisu Arabica coffee is trading at 4,000 shillings per kilogram, a price much lower than last year when a kilogram went 10,000 shillings.

The development has forced middlemen who borrowed money from the banks with the hope of making profits from coffee to sell off their estates as the banks move in to recover the money.

It’s now a common sight for travelers along Mbale-Lwakhakha Road to see posters pasted on buildings around trading centers indicating that they are up for sale.

Mathias Nabutele, the chairman of Coffee a Cup, an organization that promotes coffee in Mt. Elgon region explains that several middlemen had bought coffee last season when the farm gate market price was 9,000-10,000 shillings and hoarded it with the hope that the prices were going to keep on raising.

Nabutele says to the dismay of the farmers, the price plunged to its lowest point in ten years to the current 4000 shillings per kilogram of coffee catchment.

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Nabutele says that the opening of a commodity stock center in Mbale may help middlemen to provide information on world coffee market prices to avoid acting on speculation.

John Musila, a farmer from Magale, however, blames the low prices on inactivity at Bugisu Cooperative Union. He explains that the Union has been a pace setter in the region.

Musila says the prices went down when Bugisu Cooperative Union stopped buying coffee from farmers.

But Hajji Ahmed Wamusitu, the chairman of Bugisu Cooperative Union Elders Forum blames the low price offered for Arabica Coffee on middlemen. He says the price of coffee on the world market is stable but middlemen have continued to offer them low prices.

Wamusitu claims that Arabica coffee from Uganda has lost market because middlemen mix it with that from other regions of Uganda and export it as Elgon Arabica coffee.
He explains that the practice has forced international buyers to shun Arabica coffee from Elgon region.

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