Rwanda's coffee exports poised for recovery amid rising prices

Rwanda’s coffee exports are expected to rebound following a price increase in the international market, after the country experienced a decline in revenues in the 2023/2024 fiscal year, The New Times understands. In 2023/2024, Rwanda’s coffee export revenues dropped by 32.1 per cent to $78.7 million, down from more than $115.9 million in 2022/2023, according to data from the 2023/2024 report by the Ministry of Agriculture and Animal Resources (MINAGRI). ALSO READ: How high prices buoyed Rwanda coffee exports The report showed that the decline in earnings was partly attributed to a 17.9 per cent decrease in coffee volume to more than 16,400 tonnes in 2023/2024, from over 20,000 tonnes in the year before. These downturns can largely be attributed to the impacts of climate change [on coffee production], and fluctuating international coffee prices. According to data from the National Agricultural Export Development Board (NAEB), the average coffee price at the international market was $4.78 a kilo in 2023/2024 compared to $5.78 a kilo in 2022/2023, a 17.3 per cent fall. Oreste Baragahorana, Chairperson of the Coffee Exporters and Processors Association of Rwanda (CEPAR), told The New Times that the drop in earnings resulted from both lower prices and reduced production. However, with rising prices, exporters anticipate paying higher prices for coffee cherries while earning more from exports. ALSO READ: How Rwanda's coffee exports generated over $450m in six years Both unit price and increase in price contribute to coffee revenues, adding that its price is influenced by the dynamics at New Yok C market (New York C Market – a major exchange for coffee is trading)). “If the price remains constant [does not go down], coffee will generate more revenues,” he said, adding that farmers will benefit through getting more income. “With that positive impact, farmers will be motivated to properly take care of coffee, especially because they [some] had started exiting from it because they were not getting high income from it,” he said. If all goes well [increased price and more coffee production as a result of farmers’ motivation), he said the country will generate as much revenue as that of 2022/2023 or exceed them. Kivubelt Coffee Ltd Managing Director, Claudine Kalila Kantengwa, expressed optimism, saying that if the high coffee prices persist or increase further, Rwanda could recover its previous earnings and even exceed them. However, she cautioned that international prices fluctuate due to factors such as global economic conditions, political developments, and coffee supply levels in producing countries. Increase in Farm Gate Prices for 2025 On January 15, NAEB set the coffee farm gate price (FGP) in Rwanda at Rwf600 a kilo of high-quality coffee cherries, which represents a 25 per cent increase compared to the 2024 FGP of Rwf480 per kilo. This is the minimum price at which coffee cherries must be purchased from farmers. Farmers who earlier spoke to The New Times said that the new price is an encouragement for them to produce more coffee for higher income. ALSO READ: Farmers upbeat as coffee cherry prices rise by 25% NAEB determines the FGP based on critical factors including cost of coffee production, cost of coffee processing and transportation, coffee prices at international market (New York C Market), and US dollar-to-Rwandan franc exchange rate. The 25 per cent increase in 2025 FGP is primarily attributed to drivers, namely higher international coffee prices, and exchange rates, according to information The New Times got from NAEB. It indicated that when the 2024 FGP was announced on February 12, 2024, the coffee price at the international market was $4.28 per kilo, adding that it had risen to $7.12 per kilo by January 15, 2025, when the new one was set. Also, NAEB pointed out that in February 2024, the exchange rate stood at Rwf1,274 per one US dollar, while on January 15, 2025, it was Rwf1,387 per one US dollar. These factors underscore the interplay between global market dynamics and domestic economic conditions in determining Rwanda’s coffee farm gate price, NAEB observed. Efforts to increase coffee production, exports Despite the setbacks in 2023/2024, MINAGRI indicated in the annual report, efforts to enhance the coffee sector’s resilience. The cultivated area for coffee production was expanded to 42,429 hectares (from 42,239 hectares in 2022/2023), and over 11.9 million seedlings were prepared and planted. This investment aims to boost future production capacity, it pointed out. ALSO READ: Govt to provide over 25 million seedlings for coffee rejuvenation Rwanda’s Fifth Strategic Plan for Agriculture Transformation (PSTA 5) for 2024-2029 aims to generate coffee income of $160 million by 2029 through increased production, driven by rejuvenation of aging coffee trees (those which are at least 30 years old, leading to decreased productivity) – through replacing them with new ones, according to NAEB.

News

Rwanda's coffee exports poised for recovery amid rising prices