Determinants of coffee export in Uganda

Abstract

The study set out to investigate the determinants of Uganda’s coffee export. The study applied co-integration technique and error collection modeling to Ugandan annual data starting from 1990 to 2019. The results indicate long run relationships. The econometric results shows that the international coffee price and coffee production both have a positive and statistically significant effect of coffee export in the long run. While the real effective exchange rate is negatively correlated with coffee export and is statistically significant. From the results the study concluded that an increase in international coffee price and production increase coffee export volumes while real effective exchange rate depreciation reduce the coffee export volumes. The study recommends the creation of the strong organization that can help bargain for better price by exporters as well establishment of agreements with international coffee buyers to increase prices, put in place strong macroeconomic policies to stabilize exchange rate so as to avoid its depreciation, encourage expansion in production by supporting farmers financially and exporters their by encouraging coffee production and increase in coffee export. And lastly the study recommended that the Ugandan should put in place a coffee policy to govern the crops production and trade just like our competitors like Brazil who have had the policy for more than 50 years.

Key words: Coffee, Export, Production, Price and exchange rate