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March 28, 2011

New rules may slow Uganda coffee exports

New rules on exporting coffee from Uganda could raise business costs and slow down exports, already hit by drought and disease, in Africa's second largest grower.

Coffee exporters said the new procedure requires them to offload their cargo for customs inspection at the border with Kenya.

The authorities said the rule was crucial in verifying the goods for export through Kenya's port of Mombasa.

Uganda's coffee exports make up a major source of foreign exchange to the third biggest economy in east Africa.

Last week the Uganda Revenue Authority (URA) introduced new regulations requiring all exports leaving the country to be inspected at the border crossing.

"There's a government directive that was issued last week that all exports be verified at customs points and a communication was issued and the new procedures at customs will continue," URA spokesperson, Peter Kaujju, said.

David Barry, managing director of Kyagalanyi Coffee, said the new procedure, introduced without consulting the coffee industry, could also lead to tampering with the shipments while on their way to Kenya's Mombasa seaport.

"Offloading our cargo will mean a lot of delays in the export process and it will require manpower and extra costs and all these could affect shipments," he said on March 23.

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