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Edgar Vhera
Agriculture Specialist Writer
THE coffee sector’s average annual export earnings are set to rise by 681 percent from an average of US$1,3 million over the period 2010 to 2022 to US$9,9 million by 2030 if Government and other stakeholders are able to put together a US$22 million kitty for patient capital.
Speaking at the second edition of the horticulture investment forum held in Harare recently under the theme ‘Opportunities in the field, policy and all the way to the bank,’ the Horticultural Development Council (HDC) chief executive officer Mrs Linda Nielsen said the sector had potential to grow and ensure that the country reached its US$1 billion horticulture industry by 2030.
“The coffee sector requires US$22 million affordable long-term finance to grow it to 1 000 hectares by 2030 from the current 660 hectares. This will allow exports of 1,8 million kilogrammes of the product earning the country US$9,9 million annually,” she said.
Coffee Growers Association of Zimbabwe president Mr Michael Jenrich said coffee was a long-term crop, which required capital outlays in the first four years before harvesting started.
“Coffee is a complex and labour intensive high-value and high-margin crop, which is mostly produced by smallholder farmers. It suits well with the HDC’s ‘Hub and Spoke’ model where smallholder farmers can be aggregated and/or paired with larger producers (hub or nucleus farms) for tradeable quantities and quality,” he said.
He said the coffee industry created significant direct and indirect employment opportunities and had attractive revenues when produced intensively.
“Viability depends on a constant supply of required quantities and quality for markets (such as for premium/specialty markets) with over 95 percent of the product exported to earn the country foreign currency. Though there is high demand for the country’s coffee there is limited production to satiate the market,” Mr Jenrich said.
The country’s unique selling proposition (USP) is its top-quality coffee that is balanced with rich flavour, moderate/balanced acidity and good aftertaste. The USP is a marketing statement that differentiates a product or brand from its competitors.
“Zimbabwe’s mild Arabica coffee, is highly regarded and in demand world over. The country has three coffee mills (two in Mutare and Chipinge), with a combined annual processing capacity of over 5 000 tonnes,” he added.
Currently, there are 800 smallholder coffee farmers on 220 hectares and two estates with 440 hectares, a total of 660 hectares that is producing 450 tonnes of green coffee valued at US$2 million.
Mr Jenrich added: “Phase one of the Zimbabwe coffee production revival is targeting 1 300 small-scale producers doing 0,5 hectares each for a total of 650 hectares. It is also targeting 10 to 20 medium-scale farmers doing between five to 25 hectares each and one hub on 100 hectares. The 1 000 hectares set to be established by 2030 will guarantee production of over 2 000 tonnes with gross earnings of over US$10 million per year.”
Among the factors expected to enable the sector to achieve over 2 000 tonnes per annum quality coffee from the targeted 1 000 hectares is the establishment of a coffee fund to provide affordable long-term (over five years) loans for small holder farmers, investor (grants, loans, equity) funding, low interest rates, supportive regulations (ability to repatriate/remit investments) as well as sector coordination, he said.
Mr Jenrich said phases two and three of the Zimbabwe coffee production revival would require another investment of US$60 million to undertake production on 5 000 hectares. This investment will expand coffee production to 10 000 tonnes guaranteeing annual returns of over US$50 million for the country.
Earnings from coffee product exports have been oscillating between US$500 000 and US$2 million annually over the period 2010 to 2022.
Statistics from the Zimbabwe National Statistics Agency (ZimStats) show that the country earned its lowest figure of US$512 757 in 2017 and the largest of US$2 129 286 in 2014.
The country exported the largest quantity of coffee products of 834 721 kilogrammes in 2014 with last year’s value of 119 452 kilogrammes being the lowest over the 13-year period.
Coffee products include roasted, not roasted, decaffeinated and not decaffeinated coffee, coffee husks and skins, as well as extracts, essences, concentrates and preparations of coffee.
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