(DTIS) Update, Volume 1 – Main report - Enhanced Integrated ...

Figure 3.5: Burundian coffee value chain after reforms (circa 2015)International marketsCommodity markets ~50%Specialty markets ~50%Sales / exportDry millingWet processingCherry productionAuctions/contracts ~50%Direct sales ~50%(~40,000 tons of greenPrivatized SODECO millsPrivate dry mills ~70%(~50,000 tons ofOn farm/washed ~ 133 privatized CWSs ~ 50%(~240,000 tons ofSmallholder cherry productionVertical integration60 private CWSs ~ProducerPrivate enterpriseSource: World Bank (2011c)Some progress in Burundi’s specialty coffee segment is already visible. As a result of recent reformsthat focused on enhancing the quality of exported products and developing marketing capacities, around10 percent of Burundi’s coffee production was sold to specialty markets through direct sales in2009/2010 (World Bank 2011c; Ottaway 2010).For example, with initial support from an NGO to cover inspection, training and equipment costsone grower association in Kagombe has obtained international certification by UTZ, which broughthigher prices, higher productivity and a stable relationship with a US-based buyer 73 .As part of “relationship coffee” projects, several international buyers/roasters tours were organizedsince 2008, during which prospective buyers showed strong interest in Burundi’s quality coffee(Ottaway 2010) 74 . As a result, over a dozen specialty buyers (mostly American) have purchasedBurundian coffee through direct sale and established durable trading relationship with producers. Forexample, one of these retailers, Intelligentsia Coffee, who participated in a 5-day tour in May 2009,has been selling coffee from three CWSs in Muyinga for the third year in a row. Moreover, Burundiparticipated in a number of industry events in East Africa or in the United States in recent years, andplans on organizing its first “Cup of Excellence” competition mid-2012. 75Such success stories can have a useful demonstration effects and create incentives for producers andtheir associations to focus on quality. But a number of barriers remain.73 See Annex 6 in World Bank (2011c).74 See: www.cafeduburundi.com/markets/buyers75 See www.cafeduburundi.com/coffee-events and www.cupofexcellence.org. The internationally recognized Cupof Excellence competitions and auctions have been organized in South and Central America since the early 2000s,and have consistently commended the highest prices for specialty coffee producers.61 / 153