Coffee is Uganda’s leading cash crop and top foreign exchange earner
Uganda’s coffee exports in January 2023 amounted to 494,226 60-kilo bags worth US$ 67.35 million (UShs250.4bn), Uganda Coffee Development Authority (UCDA) has said its monthly report for January 2023.
This comprised 412,282 bags of Robusta valued at US $49.57 million and 81,944 bags of Arabica valued at US$ 17.78 million. This was an increase of 22.97% and 8.74% 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 (January 2022), Robusta increased by 30.91% and 23.84% in quantity and value respectively, while Arabica exports decreased by 5.75% and 18.85% in quantity and value respectively.
Despite most regions experiencing drought in most regions, UCDA says monthly coffee exports performance was higher than the previous year.
“This was mainly driven by exporters who offloaded coffee from their warehouses as the global Robusta market started correcting upwards on account of reduced global supplies from major origins, Vietnam and Brazil,” UCDA’s report reads.
It adds that Arabica exports were lower compared to the same month last year as this is an off-year of the biennial cycle characteristic of Arabica coffee.
Coffee exports for 12 months (February 2022-January 2023) totaled 5.72 million bags worth US$ 865.34 million compared to 6.72 million bags worth US$ 741.03 million the previous year (February 2021-January 2022). This represents a decrease of 15% in quantity but an increase of 17% in value.
Exports by Type and Grade
According to the report, the average export price was US$ 2.27 per kilo, 10 U.S cent lower than US$ 2.3 per kilo realized in December 2022.
It was 30 US cents lower than in January 2022 (US $ 2.57/kilo). Robusta exports accounted for 83% of total exports higher than 79% in December 2022. The average Robusta price was US$ 2.00 per kilo, US cents 4 lower than the previous month. Screen 18, 15 and 14 Fair Trade fetched the highest price of US$ 2.23 per kilo.
It was followed by Washed Robusta at US$ 2.20 per kilo. The share of Sustainable/washed coffee to total Robusta exports was only 2.26% slightly lower than 2.55% in December 2022.
Arabica fetched an average price of US$ 3.62 per kilo, same as previous month (December 2022). The highest price was Mt. Elgon AB sold at US$ 8.71 per kilo a premium of US $ 4.91 over conventional Bugisu AA. It was followed by Mt. Elgon B sold at US$ 6.97 per kilo, a premium of US $ 3.17 over Conventional Bugisu AA. Drugar was sold at US$ 3.31 per kilo, a discount of US cents 50 from Bugisu AA. Drugar exports were 30% of total Arabica exports compared to 39% the previous month. The share of sustainable Arabica exports to total Arabica exports was 8% compared to 17% last month.
Individual Exporter Performance
The report shows that Ugacof (U) Ltd had the highest market share of 17.89% compared to 18.35% in December 2022. It was followed by Touton Uganda Limited 11.05% (4.43%); Ideal Quality Commodities (U)Ltd 8.85% (8.02%); Kawacom (U) Ltd 8.04% (7.72%); Kyagalanyi Coffee Ltd 7.21% (5.56%), Louis Dreyfus Company (U) Ltd 7.07% (3.23%); Olam Uganda Ltd 6.66% (8.36%); Ibero (U) Ltd 4.69% (4.77%); Export Trading Company (U) Ltd 3.22% (7.01%); and Grainpulse Ltd 3.00% (1.99%).
Note that the figures in brackets represent percentage market share held in December 2022.
The top 10 exporters held a market share of 78% higher than 71% the previous month reflecting reduced concentration. Changes in exporter positions compared to last month show competition at this level. Out of the 54 exporters that performed, 26 exported Robusta Coffee only while 12 exported Arabica coffee only.
Coffee exports by destination
The destinations of Uganda’s coffee exports during the month of January 2023 show that Italy maintained the highest market share with 38.93% compared with 38.47% last month. It was followed by Sudan 19.27% (16.63%), Germany 12.49% (11.67%), India 8.47% (7.71%) and Belgium 3.59% (6.20%).
Note: The figures in brackets represent percentage market share held in December 2022.
The first 10 major destinations of Uganda coffee took a market share of 93.31% compared to 92.24% last month.
Coffee exports to Africa amounted to 119,545 bags, a market share of 24% compared to 85,044 bags (20%) the previous month. African countries that imported Uganda coffee included Sudan, Morocco, South Africa, Egypt, Algeria Kenya and Somalia.
This reflects considerable exports to the MAGREB region. Europe remained the main destination for Uganda’s coffees with a 62% imports share, lower than 64% in December 2022.
Foreign buyers of Uganda Coffee
The top 10 buyers held a market share of 66% of total exports higher than 60% the previous month. Sucafina led with a market share of 16.07% compared to 16.43% in December 2022. It was followed by Touton Geneve 11.05% (4.43%); Louis Dreyfus 7.07%;(3.38%); Olam International 7.07% (8.60%) Ecom Agro Industrialist 5.73% (8.13%); Bernhard Rothfos 5.03% (4.77%); Aldwami Company 4.18% (1.25%); Altasheel Import & Export Enterprises 3.73%, Hamburg Coffee 3.34% (4.92%) and Volcafe 2.86% (2.80%).
Note: The figures in brackets represent percentage performance in the previous month – December 2022.
There were changes in relative position of the first ten major buyers reflecting increasing demand for Uganda coffee abroad.
World coffee production for 2022/23 is forecast to rebound 6.6 million bags from the previous year to 172.8 million due primarily to Brazil’s Arabica crop entering the on-year of the biennial production cycle.
Global consumption is expected to rise 800,000 bags to 167.9 million, with the largest gains in the European Union, the United States of America and Brazil.
World coffee bean exports are forecast 3.0 million bags lower to 116.1 million as losses in Brazil, Vietnam, and India more than offset gains in Honduras and Colombia. Ending stocks are expected 1.5 million bags higher to 34.1 million. (United States Department of Agriculture, Coffee: World Markets and Trade report).
During the month of January 2023, UCDA says, farm gate prices ranged from Sh.2,000-2,400/= per kilo of Kiboko (Robusta dry cherries); Shs. 5,600-6,200/= for FAQ (Fair Average Quality); Sh. 8,000- 9,000/= for Arabica parchment; and Sh. 7,000-8,000/= per kilo for Drugar from Kasese. Robusta Kiboko averaged UGX 2,200/= per kilo; FAQ UGX 5,900/= per kilo, Arabica parchment UGX 8,500/= per kilo and Drugar UGX 7,500/= per kilo.
Outlook for February 2023
UCDA says coffee exports are projected to be 480,000 bags. The main harvesting season in Central and Eastern regions which started in October is likely to begin tailing off in February due to a short main harvest.
Exporters are likely to continue to drawdown on their stocks to fulfil contractual obligations with buyers abroad.