Farmers Enjoying Coffee High Prices As Uganda Earns Record Shs331.7bn From January Exports

Farmers are currently enjoying higher prices. Coffee is Uganda’s leading cash crop and a major foreign exchange earner/Photo taken at Heritage Kanaani Farms

Uganda’s coffee exports in January 2024, amounted to 481,586 60-kilo bags, worth US$ 85.57 million (Shs331.7bn). This is contained in the Uganda Coffee Development Authority (UCDA) monthly report for January 2024.

The exports comprised of 403,508 bags of Robusta valued at US $ 68.17 million and 78,078 bags of Arabica valued at US$ 17.40 million.

According to UCDA, this was a decrease of 2.53% in quantity and an increase of 27.23% in value compared to the same month last year.

By comparing quantity of coffee exported by type in the same month of last Coffee Year (January 2023), Robusta decreased by 2.18% in quantity and increased by 37.51 in value.

Arabica exports decreased by 4.27% and 1.60 in quantity and value respectively.

The monthly coffee exports performance was slightly lower than the previous year and this was partly on account of a small Arabica harvest in Elgon region.

“The value of coffee however increased in tandem with higher global coffee prices which have been driven by continued concerns over the supply situation, especially in Indonesia and Vietnam,” the report reads in part.

Coffee exports for the twelve months (February 2023-January 2024) totaled 6.10 million bags worth US$ 983.41 million compared to 5.73 million bags worth US$ 865.76 million in the previous period. February 2022-January 2023). This represents an increase of 7% and 14% in quantity and value respectively.

Exports by Type and Grade

The average export price was US$ 2.96 per kilo, US cents 22 higher than in December 2023 (US$ 2.80). It was 69 US cents higher than in January 2023 (US $ 2.27/kilo).

The report reveals that Robusta exports accounted for 84% of total exports, the same as in December 2023. The average Robusta price was US$ 2.82 per kilo, 21 cent higher than US$ 2.61 per kilo the previous month. The highest price was Washed Robusta sold at US$ 3.12 per kilo and it was followed by Screen 18 sold at US$ 3.08 per kilo.

The share of Sustainable/washed coffee to total Robusta exports was 1.36% compared to 1.15% in December 2023.

Arabica fetched an average price of US$ 3.71 per kilo US cents 32 higher than the previous month.

The highest price was for Mt. Elgon AB sold at US$ 5.29 per kilo. It was followed by Sustainable Arabica sold at US$ 4.99 per kilo. Drugar was sold at US$ 3.54 per kilo, 31 cents higher than 3.23 per kilo last month, and was US cents 43 lower than Bugisu AA.

Drugar exports were 34% of total Arabica exports lower than 43% the previous month. The share of sustainable Arabica exports to total Arabica exports was 19.67% compared to 11.73 in December 2023.

Individual Exporter Performance

The report shows that Ugacof(U) Ltd had the highest market share of 11.73% compared to 9.01 % in December 2023. It was followed by Louis Dreyfus Company (U)Ltd 10.21% (11.56%); Olam Uganda Ltd 10.07% (8.97%); Kyagalanyi Coffee Ltd 9.34% (6.56%), Ideal Quality Commodities Ltd 7.42% (7.92%); Ibero (U) Ltd 4.71% (7.08%); JKCC General Suppliies Ltd 4.67% (5.57%); Kawacom (U) Ltd 3.98% (6.25%), Besmark Coffee Company Limited 3.78% (4.19%); and Export Trading Company Limited 3.57% (4.58%).

Important to note is that the figures in brackets represent percentage market share held in December 2023.

“The top 10 exporters held a market share of 69% lower than 72% the previous month reflecting reducing concentration at exporter level. Changes in positions compared to last month show competition at this level. Out of the 53 exporters who performed, 24 exported Robusta Coffee only while 7 exported Arabica coffee only,” the report says.

Coffee Exports By Destination

According to the report, Italy maintained the highest market share with 41.80% compared to 39.45 % last month. It was followed by Germany 13.39% (11.47%), India 9.77% (12.05%), Spain 5.32% (5.96%) and U.S.A 4.38% (5.06%).

Note: The figures in brackets represent percentage market share held in December 2023. The first 10 major destinations of Uganda coffee took a market share of 89.64% compared to 92.07% last month.

Coffee exports to Africa amounted to 45,094 bags, a market share of 9% compared to 56,253 bags (14%) the previous month. African countries that imported Uganda coffee included Morocco, Sudan, Algeria, South Africa, Egypt, and Kenya. Europe remained the main destination for Uganda’s coffees with a 72% imports share, higher than 67% in December 2023.

Foreign buyers of Uganda Coffee

The top 10 buyers held a market share of 65% the same as the the previous month. Sucafina led with a market share of 12.60% compared to 9.47% in December 2023. It was followed by Louis Dreyfus 10.35% (11.80%); Olam International 9.94% (8.97%); Volcafe 5.95% (3.94%); Eurocaf Sas 5.88% (7.05%); Berhard Rothfos 4.71% (7.00%); Hamburg Coffee 4.17%; (3.40%) Koninklijke Douwe 3.94% (3.05%) Touton Geneve 3.87% (4.53%); and Ecom Agro Industrialst 3.28% (5.35%).

Note: The figures in brackets represent percentage performance in the previous month –December 2023.

Just like in previous months, there were changes in the relative positions of the first 10 major buyers reflecting continued demand for Uganda coffee abroad.

Global Situation

UCDA report says world coffee production for 2023/24 is estimated to reach 171.4 million bags , 6.9 million bags higher than the previous year of 164.5 million bags, with higher production in Brazil, Colombia and Ethiopia expected to offset reduced production in Indonesia.

Global exports are expected to increase by 8.4 million bags to 119.92 million bags, mainly due to strong exports from Brazil and Global coffee consumption is forecast at 169.5 million bags, with the largest increase in the European Union, the United States of America and Brazil.

Ending inventories are expected to continue to tighten to a 12-year low of 26.5 million bags. (United States Department of Agriculture, Coffee: World Markets and Trade report-December 2023).

Local Situation

During the month of January 2024, farm gate prices ranged from Sh.4,000-4,500/= per kilo of Kiboko (Robusta dry cherries); Shs.9,500-10,000/= for FAQ (Fair Average Quality); Sh. 10,000- 11,000/= for Arabica parchment; and Sh. 9,500-10,000/= per kilo for Drugar from Kasese.

Compared to the previous month, Robusta Kiboko averaged UGX 4,250 per kilo, higher than UGX 4,050 per kilo , FAQ UGX 9,750 per kilo higher than UGX 8,750, Arabica parchment UGX 10,500 per kilo higher than10,250 per kilo and Drugar UGX 9,750/= per kilo higher than 9,250/= per kilo.

Outlook for February 2024

UCDA says coffee exports are projected to be 450,000 bags. Harvesting of the main crop north of the equator and the fly crop in South western and Greater Masaka is tailing off.