Uganda earns millions of dollars from coffee exports
Uganda’s coffee exports in February 2022 amounted to 448,957 60-kilo bags worth US$ 72.17 million (Shs258.39bn).
According to Uganda Coffee Development Authority (UCDA) monthly report for February 2022, this comprised 351,944 bags of Robusta valued at US $45.9 million and 97,013 bags of Arabica valued at US$ 26.27 million.
This was a decrease of 20.43% in quantity but an increase of 42.44% 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 (February 2021), although Robusta decreased by 29.91% in quantity, it increased by 11.75% in value, while Arabica exports increased by 56.28% and 173.86% in quantity and value respectively, the report reads.
“The decrease in Robusta exports was mainly attributed to lower yields this year that was characterized by drought in some regions. This led to a shorter main harvest season in Central and Eastern regions as well as a short fly crop in Greater Masaka and South Western regions,” the report reads in part.
It adds that the increase in Arabica coffee exports is due to an on-year cycle characteristic of Arabica coffee production.
“Shortage of shipping containers in Asia and weather related concerns in Brazil fueled increase in global prices. This was however checked by the Russia/Ukraine war which led to an increase in oil prices with a negative on global commodity prices (coffee inclusive),” UCDA report reads.
It adds that Coffee exports for the 12 months (March 2021-February 2022) amounted to 6,607,963 60-kilo bags worth US$ 762.60 million compared to 5,556,059 60-kilo bags valued at US$ 515.57 million the previous year (March 2020- February 2022). This represents 18.93% and 47.91% increase in both quantity and value respectively.
Exports by Type and Grade
According to the report, the average export price was US$ 2.68 per kilo, 11 cents higher than US$ 2.57 per kilo realized in January 2022. It was US$ 1.18 higher than in February 2021 (US $ 1.48/kilo).
Robusta exports accounted for 78% of total exports, the same as in January 2022. The average Robusta price was US$ 2.17 per kilo, 5 cents higher than the previous month. Organic Robusta fetched the highest price of US$ 3.98 per kilo, a premium of 1.69 US$ over conventional Screen 18.
It was followed by washed Robusta sold at an average price of US$ 2.89 per kilo, premium of US cents 60 over Screen 18.
The share of Sustainable/washed coffee to total Robusta exports was only 1.14%
The report says Arabica fetched an average price of US$ 4.51 per kilo, 25 cents higher than in January 2022.
The highest price was for Mt. Elgon PB sold at US$ 8.49 per kilo, and was followed by Organic Wugar sold at US$ 5.27 per kilo, a premium of US Cents 35 over conventional Bugisu AA and 32 cents over Wugar.
Drugar was sold at 4.23US$ per kilo, a discount of 26 cents from Bugisu AA. Drugar exports had a 26% of Arabica exports compared to 33% the previous month. The share of sustainable Arabica exports to total Arabica exports was 12.69%.
Individual Exporter Performance
Ugacof (U) Ltd had the highest market share of 20.41% compared to 12.50% in January 2022. It was followed by Touton Uganda Limited 12.28% (8.44%); Ideal Quality Commodities Ltd 10.41% (12.50%) Olam Uganda Limited 6.73% (9.79%); Kyagalanyi Coffee Ltd 6.52% (7.09%) Kawacom (U) Ltd 6.32% (7.92%); Louis Dreyfus Company (U) Ltd 5.19% (7.45%); Ibero(U) Ltd 4.72% (5.07%); Besmark Coffee Company Limited 3.49% (3.91%); and Grainpulse Ltd 2.81% (4.41%).
It is important to note that the figures in brackets represent percentage market share held in January 2022.
The top 10 exporters held a market share of 79% the same as the previous month. There were changes in positions compared to last month reflecting competition at the exporter level. Out of the 49 exporters that performed, 21 exported Robusta Coffee only while 10 exported Arabica coffee only.
Foreign buyers of Uganda Coffee
The top 10 buyers held a market share of 71% of total exports slightly lower than 72% the previous month. Sucafina led with a market share of 19.48% compared to 11.11% in January 2022. It was followed by Touton Geneve 12.13% (8.46%); Olam international 8.24%;(11.39%); Altasheel Import & Export Enterprises 5.69% (6.17%) Louis Dreyfus 5.68% (7.54%); Ecom Agro Industrial 5.66% (7.54%); Bernhard Rothfos 4.96%; (5.07%) Volcafe 4.76%,(7.10%); Aldwami Company 3.04% (5.57%) and Icona Café 1.49% (2.60%).
It is important to note that the figures in brackets represent percentage performance in the previous month – January 2022. “There were changes in relative position of the first ten major buyers reflecting increasing demand for Uganda coffee abroad,” the report reads.
Coffee Exports by destination
Italy maintained the highest market share with 38.02% compared with 30.03% last month. It was followed by Sudan 15.23% (17.02%), Germany 11.96% (10.15%) India 6.54% (6.78%) and United States 4.39% (4.42%).
The figures in brackets represent percentage market share held in January 2022.
Coffee exports to Africa amounted to 94,647 bags, a market share of 21% compared to 97,554 bags (24%) the previous month. African countries included Algeria, Sudan, Morocco, Egypt, South Africa, South Sudan, Tanzania and Kenya. Europe remained the main destination for Uganda’s coffees with a 62% imports share lower than 58% in January 2022.
Global Situation
World coffee exports for January 2022 amounted to 10.86 million bags up by 2% from 10.65 million bags in January 2021. The ICO Composite Indicator price increased by 3.2% to 210.89 US cents up from 204.29 US cents in January 2022. The prices have seen a positive trend since October 2020 due concerns of supply shortage as a result of adverse weather conditions in Brazil and supply disruption caused by shortage of containers in Asia.
Certified stocks at the major exchanges of New York and London continued to decline in the month of February. The stocks declined by 22.9% and 1.9% in New York and London respectively. Global coffee production for 2021/222 coffee year is estimated to decrease by 2.1% to 167.2 million bags down from 170.83 million bags in Coffee Year 2020/21.
Global consumption is estimated to increase by 3.3% to 170.3 million bags in 2021/22 coffee year compared to 164.9 million bags in 2020/21 coffee year (ICO February 2022 report).
Local Situation
During the month of February 2022, farm gate prices ranged from Sh.2,700-3,200/= per kilo of Kiboko (Robusta dry cherries); Shs. 6,500-7,000/= for FAQ; Sh. 11,000- 12,000/= for Arabica parchment; and Sh.,9,500-10,000/= per kilo for Drugar from Kasese. Robusta Kiboko averaged UGX 2,950/= per kilo; FAQ UGX 6,750/= per kilo, Arabica parchment UGX 11,500/= per kilo and Drugar UGX 9,750/= per kilo.
Outlook for March 2022
According to UCDA, coffee exports are projected to be 430,000 bags. The main harvesting period season in Central and Eastern has ended. “Exporters will have to release their stocks to fulfil contractual obligations,” UCDA says in its report.
