Factors that affect the profitability of coffee among coffee traders in Luweero district

Abstract

The aim of this study was to investigate factors affecting the profitability of coffee among coffee traders in Luweero district. The objectives included the following; characterizing the marketing system among coffee traders in Luweero district, estimating the marketing margins among coffee traders in Luweero district and finding out factors affecting coffee marketing margins. A simple random sampling technique was used to select 44 respondents for face to face interview using a structured questionnaire. The study used both descriptive and regression analysis to analyze the marketing costs and marketing margins involved in coffee enterprise. The results showed that though coffee trading is profitable, profits deferred along the marketing chain. The major factors affecting the margins include; difference in costs involved during marketing, the purchasing prices, selling prices of coffee and quantities of coffee bought. Factors such as age, trading experience and distance to market negatively affect profitability of coffee while off-trade income, access to credit and sex of traders positively affect the profitability of coffee among coffee traders in Luweero district. Coffee traders in Luweero district face challenges such as high transport costs, storage losses, low quality coffee and poor infrastructure. They can overcome these problems through lowering the costs of operation and minimizing storage losses, increase the quantity of coffee dealt in to decrease per unit costs involved in coffee marketing.