Uganda is increasingly earning big from coffee exports
Uganda’s coffee exports in July 2021 amounted to 700,035 60-kilo bags worth US$ 69. 93 million (246.68bn), Uganda Coffee Development Authority (UCDA) monthly report for July has revealed. This comprised 660,458 bags of Robusta valued at US $62.89 million and 52,939 bags of Arabica valued at US$ 8.31 million.
This was an increase of 28.77% and 39.27 % in quantity and value respectively compared to the same month last year.
By comparing quantity of coffee exported by type in the same month of last Coffee Year (July 2020), UCDA says Robusta increased by 41.27% and 56.32% in quantity and value respectively, while Arabica exports decreased in both quantity and value by 47.99% and 29.42% respectively.
According to UCDA, coffee exports for the 12 months (August 2020-July 2021) amounted to 6,234,349 60-kilo bags worth US$ 578.90 million compared to 5,185,789-kilo bags valued at US$ 502.50 million the previous year (August 2019-July 2020).
This represents 20.22% and 15.20% increase in both quantity and value respectively.
The quantity of coffee exported in July was the highest in a single month surpassing the previous month’s exports, while the total export quantity in 12 months was the highest in 30 years.
“Increasing Robusta exports during the month compared to the previous year were due to newly planted coffee which started yielding supported by favourable weather. This was also compounded by a positive trend in global coffee prices in the month of July as Brazil faced the threat of frost, which prompted exporters to release their stocks on top of increased procurement,” UCDA report reads.
It adds: “The decrease in value of Arabica coffee was due to low volumes exported. Arabica monthly exports continued to reduce compared to the previous year which is attributed to the off-year biennial cycle characteristic of Arabica production and drought experienced in Mt. Elgon region.”
Exports by Type and Grade
The average export price was US$ 1.66 per kilo, 8 cents higher than US$ 1.58 per kilo realized in June 2021. Robusta exports accounted for 94% of total exports higher than 91% in June 2021. The average Robusta price was US$ 1.59 per kilo, 11 cents higher than the previous month.
Organic Screen 14 fetched the highest price of US$ 2.12 per kilo, a premium of 41 and 49 cents over conventional Screen 18 and Screen 15 respectively. It was followed by Screen 14 sold at an average price of US$ 1.96 per kilo, a premium of 43 cents over screen 12 The share of Sustainable/washed coffee to total Robusta exports was only 0.33%.
The report shows that Arabica fetched an average price of US$ 2.97 per kilo, 35 cents higher than in June 2021. The highest price was Organic Drugar at US$ 11.24 per kilo, a premium of 8.38 $ over conventional Bugisu AA sold at US$ 2.86 per kilo. This was followed by Mt. Elgon A+ sold at US$ 3.78 per kilo. Drugar was sold at US$ 2.96 per kilo, a discount of 10 cents from Bugisu AA. Organic Drugar was sold at US$ 11.24 per kilo, a premium of US $ 8.24 over conventional Drugar.
The share of sustainable Arabica exports to total Arabica exports was 4.07%. Drugar exports had a 46% of Arabica exports compared to 65% the previous month.
Foreign buyers of Uganda Coffee
The top 10 buyers held a market share of 63% of total exports, the same as the previous month. Sucafina led with a market share of 16.29% compared to 19.25% in June 2021. It was followed by Olam International 12.03% (10.42%); Ecom Agro Industrial 6.51% (5.86%); Bernhard Rothfos 4.81% (5.34%); Altasheel Import and Export Enterprises 4.78% (5.43%); Luigi Lavazza 4.71% (3.23%); sarl Sodplus 4.13% (2.70%); Hamburg Coffee 3.94% (4.62%), Volcafe 3.79% (3.35%) and Pacorini Silocaf 2.41% (1.88%).
It’s important to note that the figures in brackets represent percentage performance in the previous month – June 2021.
UCDA says minimal changes in relative position of the first five major buyers compared to the previous month reflect competitiveness of Uganda coffee abroad.
Coffee Exports By Destination
Italy maintained the highest market share with 36.25% compared with 34.57% last month. It was followed by Germany 12.12% (13.11%), India 8.83% (9.52%) Algeria 8.54% (6.28%) and Sudan 8.18% (7.81%). The figures in brackets represent percentage market share held in June 2021.
Coffee exports to Africa amounted to 147,652 bags, a market share of 21% compared to 112,416 bags (18%) the previous month. African countries included Sudan, Morocco, Kenya, Algeria, Egypt and Somalia. Europe remained the main destination for Uganda’s coffees with a 61% imports share.
Global Situation
World coffee exports for Coffee Year 2020/21 are estimated at 142.4 million bags compared to 138.4 million bags in Coffee Year 2019/20 according to Coffee: World Markets and Trade report (USDA). The major drivers of this increase in exports are: Brazil (45.0 million bags), Vietnam 25.6 million bags), Colombia (13.8 million bags), Indonesia (7.8 million bags) and Uganda (5.9 million bags).
The ICO Composite Indicator price increased by 7.9% to 152.24 US cents from 141.03 US in June 2021. The prices have seen a positive trend since October except in the last 2 weeks of July due to an expected reduction in supply in key producing countries, Brazil and Vietnam. Global coffee production for 2020/21 is estimated to increase by 3.8% to 175.8 million bags up from 169.3 million bags in Coffee Year 2019/20.
Global consumption is estimated to increase by 0.6% % to 163.1 million bags (USDA, June 2021: Coffee: World Markets and Trade Report).
Local Situation
During the month of July 2021, farm gate prices ranged from Sh.2,000-2,500/= per kilo of Kiboko (Robusta dry cherries); Shs. 4,500-5,200/= for FAQ; Sh. 6,800-7,000/= for Arabica parchment; and Sh. 6,000-6,500/= per kilo for Drugar from Kasese. Robusta Kiboko averaged UGX 2,250/= per kilo; FAQ UGX 4,850/= per kilo, Arabica parchment UGX 6,900/= per kilo and Drugar UGX 6,250/= per kilo.
Outlook for August 2021
UCDA says coffee exports are projected to be 600,000 bags as the main harvesting period in Greater Masaka and South Western regions tails off.
“During the month, rains may affect the transportation of the little coffee remaining in the country side,” UCDA says.
