14 Sep 2017

What are Ghana’s prospects on the Global coffee production market?

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Ghana is one of the fastest growing and most promising economies in Sub-Saharan Africa. The country offers the utmost opportunities for consumer goods companies globally. Coffee is an important agricultural commodity, second only to oil in the Global trade. In Africa, about 33 million populations directly depend on coffee for their source of revenue and it is the pillar of the national economy, contributing over 10% of the export earnings of some fourteen African countries.
Internationally, coffee generates over US $12.44 billion yearly to the coffee producing and exporting countries, with a retail value of about US$70 billion. Ghana appears to have a dream of becoming a booming coffee exporter. However, that dream seems as remote as it can possibly be, considering the strong coffee market in the International platform and the unrelenting competitiveness of the market leaders.
Ghana’s Global Perspective-Market Overview
According to the ICO (International Coffee Organization), coffee exports globally amounted to 10.88 million bags in May 2017, compared with export amounted 10 million in May 2016. Coffee exports in the first 8 months of year 2016/17 (Oct/2016 to May/2017) have increased by 5 % to 81.32 million bags compared to 77.44 million bags in the same period in the previous coffee year. It is estimated that in the 12 months ending May 2017, overseas exports of Arabica totaled 74.49 million bags as estimated last year around 71.49 million bags; whereas Robusta exports amounted to 45.59 million bags as compared to 43.92 million bags.
Meanwhile, available records revealed that Ghana’s coffee production has been on the decline stage and has not matched the high production attained during the mid-1960s. Ghana is continuously recording shortfalls in its coffee production. Arabica and Robusta prices went in opposite directions as the country does not produce Arabica- the most popular species of coffee; it produces Robusta (less popular species). Even the then president, said there were plans to increase the production of coffee in the country from the current 6,000 metric tonnes to 100,000 metric tonnes annual in the short to medium term. He indicated that 5 million better-quality early maturing and high yielding coffee seedlings were being raised and will be freely distributed to farmers interested in growing the crop. There are some exciting reports which say, the CRIG (Cocoa Research Institute of Ghana) has developed a better variety high-yielding coffee, which can start bearing fruit within 2-3 years after planting, with proper management.
Prospects in the sector- Overview
The Ghanaian coffee sector presents immense opportunities for the country to make great steps towards economic transformation. Conditions available to help sharpen the sector to the next level include improved access to extension services, favorable weather for the Robusta, growing and competitive local marketplace characterized by heavy demand for the produce, increasing and reliable farm gate prices, growing interest among the youth and increasingly high farmer motivation.
Meanwhile, Ghana is still grappling with the basics of getting it into right tune; other African countries are leading the pack – mainly Ethiopia. Ethiopia is one of the prime exporter of coffee in Africa. In 2015, the country sold approx. 127,000 tonnes of coffee and even earned $866 million exporting 221,000 tonnes of coffee in the year 2016. Other coffee producing countries are Uganda, Kenya, Ivory Coast, Tanzania and Rwanda. Ethiopia produces 39 % of all coffee produced in Africa, according to calculations by the Mail & Guardian.

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