Coffee exporters cry foul over breached contracts

Coffee exporters have petitioned the Private Sector Federation (PSF) to intervene and help follow up breached contracts that could result in financial losses as their foreign buyers continue to dishonour business contracts.
Local coffee exporters have decried loss of money as foreign buyers decline or delay their payments. The New Times/ File.
Local coffee exporters have decried loss of money as foreign buyers decline or delay their payments. The New Times/ File.

Coffee exporters have petitioned the Private Sector Federation (PSF) to intervene and help follow up breached contracts that could result in financial losses as their foreign buyers continue to dishonour business contracts.

Emmanuel Rwakagara Nzungize, the Chairperson of the Coffee Exporters Association said that most local coffee exporters lose money as their foreign buyers decline or delay to pay the amount agreed as per the contract,

“We want to see how we can be assisted so that once we sign a contract with the buyers, then it can be honoured by paying what we have supplied to them,” he said during a dialogue meeting of exporters and PSF on Wednesday.

He noted that there are some buyers who after signing contracts with exporters at an agreed price later change and buy from other suppliers without the consent of the exporter, which leads to losses on the part of exporters through disruptions in planning.

With official statistics indicating that coffee fetched US$75m last year from US$56m in 2010, the crop is one of Rwanda’s top exports.

Jean Bosco Ngabonziza of Rusizi Specialty Coffee noted that most exporters do not understand contracts well; hence they end up accepting terms that would in future jeopardise their businesses.  “Our buyers tell us to sign contracts which we don’t understand,” he lamented.

Faustin Mbundu, the Chairman of PSF, said that there is need to organise training programmes on business contracts for exporters.

“PSF has the capacity to help you resolve all these challenges,” he said, adding that exporters should start looking at using the Kigali International Arbitration Centre, which expected to be operational soon.

Gilbert Gatali, the Managing Director KZ NOIR LTD, an investment company in various coffee companies, said that there is need for Rwanda to become an active member of the World Coffee Organisations to have a stronger voice on international coffee markets.

dias.nyesiga@newtimes.co.rw

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