Determinants of the Volume of Coffee Exports: Case Study: Uganda (2005 Q4 - 2018 Q4)

Abstract

The study set out to find out the determinants of the volume of coffee exports in Uganda in the outlook of an export supply framework. The hypotheses tested were that; there are no long-run determinants of the volume of coffee exported, there are no short-run determinants of the volume of coffee exported and that there is no causal effect between the volume of coffee exported and the price of the coffee exported, the total volume of coffee produced quarterly and the total acreage used in the production of coffee. The study applied cointegration and error correction modelling to Ugandan quarterly data from the year 2005:4 to 2018:4. The results indicate the existence of a long-run relationships. The econometric results show that there is a significant relationship between the volume of coffee exported and the total quarterly product of coffee with a p-value of 0.000 and the total acreage covered in coffee production also significantly determines the volume of coffee exported in the long-run with a p-value of 0.016. However, unit price of the coffee exports is statistically insignificant in the short and long-run, acreage covered in coffee production is also insignificant in the short-run. From the results, it is concluded that increase in the crop output of coffee increases the volume of coffee exports in the short and long-run, if the land covered in coffee production is also increased, it would lead to more output and hence increase in the volume of coffee exports in the long-run.