Uganda blames withdrawal from coffee body agreement on unfair trade terms

KAMPALA, Feb 18 (Reuters) - Uganda on Friday blamed its withdrawal from an International Coffee Organisation (ICO) agreement this month on what it said are unfair tariffs and other barriers that restrict export of processed coffee to Europe and elsewhere.

Africa's largest coffee producer behind Ethiopia had not previously cited reasons for pulling out of a two-year extension to ICO's 2007 International Coffee Agreement (ICA), effectively withdrawing from the pre-eminent intergovernmental body tasked with overseeing global coffee production and trade and fostering cooperation between producers and consuming countries.

"Uganda needs unconditional market access that allows for export of value-added coffee, not only green coffee," the state-run Uganda Coffee Development Authority (UCDA) said in a statement.

"The new coffee agreement should have increased focus on value addition with protracted programmes that aim at transferring value to the farm gate."

President Yoweri Museveni has long complained about what he says are lopsided trade rules that rob the likes of Uganda of value in key commodities such as coffee.

Coffee output in the East African country has been rising in recent years on the back of aggressive planting programmes that have expanded acreage covered by the crop.

Earnings from the beans are Uganda's second-biggest source of foreign exchange behind gold, central bank data shows.

In the 12 months to Sept. 30 last year Uganda exported 6.5 million 60kg bags and earned $630 million.

"The importing countries impose escalating tariffs and restrictions on imports of value-added coffee," the statement said, citing countries including Germany, Belgium and Denmark.

"These barriers should be negotiated and removed, in order to create even more value for the Ugandan coffee sector."

UCDA said that Uganda is also opposed to unjust and outdated ICO classification of coffee varieties in the international market, which only recognises Brazil and Colombia beans at the expense of coffee from Uganda and other countries.

Reporting by Elias Biryabarema Editing by David Goodman

Our Standards: The Thomson Reuters Trust Principles.