Ugandan coffee exporting company Hampage (U) Ltd has been accused of breaching a $ 933,046 coffee supply contract with a Singaporean company.
Documents seen by East Africa show that in May 2021, the Singaporean company – Suncof Global Pte Ltd – entered into a contract with Hampage to purchase 747,000 kg of natural robusta green coffee (FAQ Quality) valued at $ 933,046 in Uganda, the merchant of Kampala based cafe acting as agent.
But Hampage would not have respected the agreed conditions and would not have provided the shipment.
According to correspondence between the two companies and the coffee regulator, the Uganda Coffee Development Authority (UCDA), Hampage delivered 663,650 kg of graded coffee valued at $ 839,818.21 and defaulted on 83,350 kg. of coffee valued at $ 93,227.79. This despite payment of the total contract amount totaling $ 933,046, which included export processing and handling charges.
Today, Suncof, 100% owned by one of India’s largest coffee roasting companies, Vayhan Coffee Ltd, demands delivery of the outstanding coffee shipment or a refund of $ 93,227.79 plus interest at the rate of 24% per annum. According to the agreement, Hampage was to deliver all coffee by June 10, 2021. Under the agreement, Hampage was to source coffee with a maximum moisture content of 14%, process it, grade it, sort it. by color and deliver it to Suncof. in free on truck conditions (FOT) with all grades.
The negotiated and agreed prices included FAQ coffee ($ 1.18 per kg), processing without color sorting ($ 0.038 per kg), color sorting ($ 0.016 per kg) and export documentation (0, $ 07 per kg). Suncof maintains that Hampage’s failure to meet its contractual obligations has put its Singapore operations in a difficult position, with risks of closure due to a coffee shortage.
The company brought the issue to the attention of the UCDA on June 21, asking the regulator to intervene and take appropriate action against the reseller and have him refund the money paid to him or deliver to him. the coffee he received money for. “We ask for your good offices to take the appropriate action against Hampage (U) Ltd and do us justice either by having them deliver the balance of the 83,350 Kgs coffee, or by repaying them the excess advance of $ 93,227.79 which has been paid to them for a long time with interest at the rate of 24% per annum â, indicates the letter from Suncof to the director general of UCDA, Emmanuel Iyamulemye Niyibigira, dated July 12, 2021.
Dr Niyibigira and Hampage director Lubega Shafik could not be reached for comment as they did not respond to questions emailed at press time.
Coffee is Uganda’s main cash crop and a major source of foreign exchange, contributing around 15 percent of the country’s total export earnings. The country, Africa’s leading coffee exporter, has relaunched an ambitious campaign to become the world’s leading coffee exporter by 2025 after Brazil and Vietnam. Uganda is the world’s fourth largest producer of Robusta, after Vietnam, Brazil and Indonesia
According to the UCDA monthly report, Uganda exported 700,990 60kg bags of coffee worth $ 75.09 million in August 2021, at a weighted average price of $ 1.79 per kilogram. Uganda grows two types of coffee, Robusta and Arabica, at a ratio of 4: 1.
Farm-gate prices for Robusta Kiboko were on average 2,650 Ush ($ 0.73) per kilogram, 5,150 Ush FAQ ($ 1.43), Arabica parchment at 8,000 Ush ($ 2.23) and of 7,250 Ush Drugar ($ 2.02) per kilogram.
The destinations for Uganda’s coffee exports in August 2021 were Italy, which maintained the highest market share at 34.02 percent, followed by Germany (13.39 percent), Sudan (10.43 percent), Algeria (10.22 percent) and India (7.76 percent).
Europe remained Uganda’s main destination for coffee exports, with 61 percent, with Africa controlling a 24 percent market share.
African countries importing Ugandan coffee are Sudan, Morocco, Kenya, Algeria, Egypt, Madagascar and Somalia.