Farmers’ income is expected to increase by Rwf70 per kilogramme of quality coffee cherries as a result of a new minimum price at which the commodity must be bought from them.
The new coffee farm gate price is contained in a communique set by the National Agricultural Export Development Board (NAEB).
https://pbs.twimg.com/media/GGMyM29WcAAmZqB?format=jpg&name=large
It shows that well-ripened cherries must be bought from farmers at a minimum of Rwf480 a kilogramme in the 2024 season – effective February 12.
This represents an increase of 17 per cent – or Rwf70 – compared to Rwf410 per kilogramme that was set in February 2023.
NAEB warned that no one is allowed to buy coffee from farmers below the set farm gate price.
Farm gate prices intend to protect farmers from exploitation by unscrupulous buyers.
Farmers have the possibility to get higher prices for their produce than the farm gate one, in case there are buyers competing to get it.
ALSO READ: How high prices buoyed Rwanda coffee exports
Odette Murekatete, president of Dukunde Kawa Musasa – cooperatives of more than 1,100 coffee farmers in Ruli Sector of Gakenke District – told The New Times that the new price is boost for farmers.
"The previous price was little compared to investments we put in coffee farming. The new price implies more income for us, and a motivation for us to produce more and quality coffee,” she said.
NAEB CEO Claude Bizimana told The New Times "quick feedback shows that farmers are happy with this new price,” referring to its implication.
Talking about factors that influence coffee farm gate price, Bizimana said that they include; the cost of production at farmers’ level, cost of processing and transportation, coffee prices at New York C-Market, and exchange rate – US Dollar versus Rwandan Franc.
New York C-Market is coffee commodity exchange that helps to standardise the trade of coffee and influences the global price of the beverage, hence effecting both its farmers and consumers.
ALSO READ: Rwandan coffee ‘penetrating Los Angeles market’
Bizimana pointed out that the farm gate price will be applicable until NAEB sets another price, whether during this season (if necessary) or at the beginning of the 2025 season.
In the financial year 2022/2023, Rwanda exported slightly over 20,000 tonnes of coffee which generated almost $116 million (approx. Rwf148 billion), according to a June 2023 statistics report by NAEB.
This represents a 53 per cent increase in coffee revenues compared to $75.5 million earned from more than 15,000 tonnes sold at international markets, indicated the report.
The drivers of that export performance include higher coffee prices that averaged $5.7 per kilo in 2022/23, compared to the $4.9 per kilo average price in 2021/22, and an increase of 32 per cent (or 4,880 tonnes) compared to the previous year volume.