Uganda coffee exports withstand recession

By Muchena Zigomo

CAPE TOWN (Reuters) - Uganda's coffee exports and output have been unaffected by the global economic downturn and prices are expected to remain stable in the short term, its agriculture minister said on Monday.

Uganda is Africa's second biggest coffee grower after Ethiopia, and exports its coffee beans mainly to Europe.

"There has been no impact that we have seen from the drop in the global economy ... we forecast that prices will be stable in the short term," Aggrey Bagiire told Reuters on the sidelines of an agribusiness conference in Cape Town.

The east African country earned $35.6 million from coffee bean exports last June, and shipped 220,620 60-kg bags worth $20.26 million last month compared with 231,442 bags and $29.48 million in May last year.

Bagiire said Uganda was courting foreign investment to produce coffee in the country.

"Our biggest challenge is that we are now trying to attract investors to come to produce coffee.

"We have some foreign investors, but in our eyes the projects are minute and the potential for investment is still enormous. Our view is that we want private sector to lead."

Presenting Uganda's 2009/10 budget last week, Finance Minister Sydda Bbumba said agriculture spending, including grants, will rise 39 percent to 310.73 billion shillings.