Coffee market prices have been unstable over time. Determining the impact of supply and demand shift on price is a subject of discussion in this research journal. In order to enhance investment and achieve a sustained increase in agriculture production especially coffee, coherent and integrated long-term strategies and policies are required to reduce risk aversion and build resilience in Rwandan farmers as well as its economy. Furthermore, the critical importance of social protection and its complementarities to risk management initiatives must be recognised. This journal focuses on influence on price fluctuation on coffee production in Rwanda. The objective of this research journal is to analyse the influence on price fluctuation on coffee production in Rwanda using data collected from RAB starting from 2009 to 2019.
The researcher employed statistical and econometrics approach to estimate the annual shifts in demand and supply for the periods from 2009 to 2019. This approach gave estimates to change in demand and supply of a coffee commodity which is due to other factors apart from the coffee’s own price. The research design is based on the quantitative research based on econometrics models under study, the data collected from public publications such as NISR, RAB, MINAGRI, CIA, WORLD BANK. The temperature and rain had a significant influence on coffee production. This is explained by the coefficient of temperature and rain are 0.329 and 0.48, it implies that 32.9% of temperature contributed positively to production and it increased by 32.9% by one percent of production and its probability of less than 5% thus, it is statistically significant and contribute to production positively, thus positive relationship. The Demand shift had a significant influence on coffee production. This is explained by the coefficients demand shift is -0.40 which implies that demand shift decreased by 40% to one percent of production and its probability of 0.085 to 96.9% this implies that demand shift decreased by 40% on one unit of production. Demand shift had a significant influence on coffee production. Supply shift on coffee production contributed to 97.2% to coffee production and its probability less than 5%, it implies that 97.2% of supply shift increased to one percent of coffee production. Finally the intervening variables, one is the exports which contributed positively to production
since it increased by 13.2% on one percent of Production and also the probability is 17.5% less than 5%, thus there was weak relationship between export and production ,import, its coefficient is 0.48 which implies that it increased by 48% on one percent of production and its probability of 0.03, there is a positive relationship and government subsidies such as fertilizers used was 0.842 which implies that there was a strong relationship between fertilizers used and coffee production, its probability of less than 5%.Thus it implies the fertilizers increased by 84.2% by one percent of production. The researcher concludes that weather, supply have positive contribution while demand has a negative contribution and recommends that the government should concentrate on the macroeconomic framework that aims strengthen the agriculture sector through increase of demand and supply of agriculture products to increase the internal market through exports. As well as strengthening the foreign cooperation to deal with climate change so that the rain and temperature can be the solution for Rwandan agriculture and focus on the subsidy since the findings reveal that they influence the agriculture production.
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