About 120 washing stations were established which are expected to produce 5,000 tonnes of high quality coffee. This is only 22 percent of the total production, but the volume of fully washed coffee was expected to grow from 3,000 tonnes.
The year 2008 saw Rwanda’s coffee industry register dividends. Last year, the cash crop registered $30.2m, largely from exports. The crop is the leading foreign exchange earner alongside tea, tourism and minerals.
With steadily increasing earnings over the years, government this year set its coffee revenue earnings at $50.9m, an increase from last year’s total sales. This was expected from 28,000 tonnes of coffee.
In response, the Rwanda Coffee Development Authority (Ocir-Café) started an aggressive campaign to achieve the target.
Ocir café embarked on production of seedlings for expansion on new areas and replacement of old trees. However, this was a long term strategy to realise coffee production increase and consequently, earnings.
In the short term however, intensification of coffee farming by using fertilisers, pesticides and good agricultural practices were introduced.
This was also under the help of Sustaining Partnership to Enhance Rural Enterprises and Agribusiness Development (SPREAD), a USAID programme.
Now with the expected production increase and the need for value addition, Ocir-Café set up plans to improve coffee processing.
About 120 washing stations were established and expected to produce 5,000 tonnes of high quality coffee. This is only 22 percent of the total production, but the volume of fully washed coffee was expected to grow from 3,000 tonnes.
The quality coffees would bring about high returns through exports that are crucial for Rwanda, which is seeking to cut down high poverty levels among its 10 million people.
Having addressed value additions and increase in production, Ocir-Café enrolled for an aggressive marketing and creating more visibility for the Rwandan coffee on the international market.
Alex Kanyakole, the Director General of OCIR-Café explained that with the expectation of increase in coffee production, there is need for a marketing strategy which also takes into consideration quality improvement.
This was massively campaigned through the international quality coffee competition known as the Cup of Excellence (CoE). It was the first event in Rwanda and Africa. He therefore explained that the CoE competition is one of the strategies to promote quality and market Rwandan coffee.
It was a tough competition open to all coffee farmers through cooperatives and washing stations. A total of 207 coffees from different washing stations and cooperatives participated in the pre-screening but only 125 coffees qualified for the next round of examination.
The national jury decided the best samples for submission to the international jury to determine award winning coffees. A highly competent jury from renowned coffee roasters, suppliers, and processors approved by the Alliance for Coffee Excellence (ACE) determined the winning coffees.
They explored the sources and flavour parameters of fine coffee for proof of origin. The intervention of the international jury, with their experience in coffee cupping, was to approve the quality of Rwandan coffee in relation to other coffees on the international market.
Coffees that continuously scored highly enough (above 85) were allowed to move forward in the competition. The final 24 coffees were awarded the prestigious Cup of Excellence and sold to the highest bidder during an internet auction.
During the international on-line auctioning, Rwandan coffee scored a record $39.7 (Rwf21,865) per kg. Out of the 24 coffees awarded the CoE, coffee from Multi-sector Investment Group Ltd (MIG), received highest bid from Solberg and Hansen AS, one of the largest suppliers of specialty coffee in Norway.
The coffees attracted over 70 bidders from 25 countries around the globe these being coffee buyers and sellers. Bids were made per pound where 1 kg represents 2.20462262 pounds. The minimum value per pound was $2.00. 40 percent of the price was to go back to the farmers.
The lowest bid was $9.1 per kg ($4.2 per pound) for coffee from Coopac Kirorero, ranked 24 in the CoE competition. In additional to the competition, former US President Bill Clinton pledged to promote a new brand of Rwanda’s coffee called, “Rwanda Farmers” through the Clinton Hunter Development Initiative (CHDI).
He said his aim was to connect Rwandan farmers directly to retail markets through a brand they fully owned. The new brand, “Rwandan Farmers” coffee launched in June 2008 is now being sold in more than 800 retail outlets in Europe.
In the same developments, CHDI brokered a licensing agreement with Scottish-based coffee roaster, Matthew Algie in which 16 percent is paid to the farmers’ trust for every sale made.
Despite a poor start at the beginning of the year due to the Kenyan post-election violence that affected exports and imports, these campaigns raised coffee earnings to 42.04 percent in the first eight months.
This is above last year foreign earnings of $18.5 million and justifiable with its first half earnings of $15 million this year. However, target of $50.9m was explained not to be attainable. Ocir-Cafe officials said that this was partly because of seasonal and climatic variations that did not stimulate production.
Different provinces in the country experienced variations in rain which affects production. Therefore production was expected at 23,000 tonnes-this is a 20.6 percent decrease of the expected production of 28,000 tonnes.
This drew back coffee earnings from the expected $50 million (Rwf27.5 billion) to about $46 million (Rwf25.3). Currently, Rwandan coffee is enjoyed by international consumers, with Europe provides the biggest market share of 50 percent, Asia and the rest of the world (25 percent) while domestic consumption is estimated at only five per cent.
Further more, the global financial crisis never affected the industry since most of its exports to the US market had already been met. The country exports about 20 percent of its coffee to the US market.
The country is now aiming high to achieve its target of the next year. Rwanda coffee exporters have targeted an ambitious $75m (Rwf41.4 b) revenue from coffee exports next year. At the same time, government seeks to collect $100 million (Rwf55.1 billion) from 35,000 tonnes of coffee exports by 2012.