Uganda Earns Shs272bn From May Coffee Exports As Drought Affects Robusta Production

The Banyantereza Sisters drying coffee inside a solar powered drier. Uganda earns billions monthly from coffee exports/Business Focus Photo

Uganda coffee exports in May 2022 amounted to 455,166 60-kilo bags worth US$ 73.01 million  (Shs272.1bn), Business Focus reports.

According to the monthly report for May 2022 by Uganda Coffee Development Authority (UCDA), this comprised 350,312 bags of Robusta valued at US $47.31 million and 104,854 bags of Arabica valued at US$ 25.71 million.

This was a decrease of 7.75% in quantity but an increase of 55.15% 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 (May 2021), Robusta decreased by 18.35% in quantity but increased by 26.21% in value.

The report says Arabica exports increased by 62.86% and 168.41% in quantity and value respectively.

“The decrease in Robusta exports was mainly attributed to lower yields this year that were characterized by drought in some regions. This led to a shorter main harvest season in Central and Eastern regions. The increase in Arabica coffee exports is due to an on-year cycle characteristic of Arabica coffee production,” the report reads in part.

It adds that coffee exports for the 12 months (June 2021-May 2022) amounted to 6,346,594 60-kilo bags worth US$ 837.14 million compared to 5,880,179 60-kilo bags valued at US$ 540.54 million the previous year (June 2020- May 2021).

This represents 7.93% and 54.87% increase in both quantity and value respectively

Exports by Type and Grade

According to the report, the average export price was US$ 2.67 per kilo, 23 cents lower than US$ 2.90 per kilo realized in April 2022.

It was US$ 1.08 higher than in May 2021 (US $ 1.59/kilo).

Robusta exports accounted for 77% of total exports higher than 68% in April 2022.

The average Robusta price was US$ 2.25 per kilo, 1 cent lower than the previous month.

Washed Robusta and Organic Robusta fetched the highest and second highest price of US$ 2.79 per kilo and US$ 2.48 per kilo, a premium of 43 and 12 US cents over conventional Screen 18 respectively.

The share of Sustainable/washed coffee to total Robusta exports was only 0.98%. The proportion of Screen 18 was 11% of total Robusta.

Arabica fetched an average price of US$ 4.09 per kilo, 20 cents lower than in April 2022. The highest price was for Wugar sold at US$ 5.38 per kilo , and was followed by Sustainable Arabica Fully Washed Sipi Falls sold at US$ 5.28 per kilo, a premium of US Cents 40 over conventional Bugisu AA. Drugar was sold at 4.10 US$ per kilo, a discount of US cents 78 from Bugisu AA. Drugar exports were 54% of total Arabica exports compared to 43% the previous month. The share of sustainable Arabica exports to total Arabica exports was 5%.

Individual Exporter Performance

The report show that Ugacof (U) Ltd had the highest market share of 15.65% compared to 11.11% in April 2022. It was followed by Touton Uganda Limited 11.43% (9.77%); Ideal Quality Commodities Ltd 10.39% (7.47%) Olam Uganda Limited 9.15% (8.50%); Kyagalanyi Coffee Ltd 8.69% (6.93) Kawacon (U) Ltd 5.24% (13.10%); Ibero (U) Ltd 4.90% (3.82%); Louis Dreyfus Company (U) Ltd 3.82% (5.27%); Export Trading Company (U) Ltd 3.87% (4.63%); and Besmark Coffee Company Limited 3.70% (3.58%).

Importantly, the figures in brackets represent percentage market share held in April 2022.

“The top 10 exporters held a market share of 77% higher than 75% the previous month. There were changes in positions compared to last month reflecting competition at the exporter level. Out of the 47 exporters that performed, 20 exported Robusta Coffee only while 10 exported Arabica coffee,” the report says.

 Foreign buyers of Uganda Coffee

According to the report, the top 10 buyers held a market share of 73% of total exports higher than 66% the previous month. Sucafina led with a market share of 16.21% compared to 12.78% in April 2022. It was followed by Touton Geneve 12.20% (9.77%); Olam International 11.08%;(9.26%); Ecom Agro Industrial 5.87% (11.21%) Volcafe 5.60% (4.25%); Bernhard Rothfos 5.28% (3.82%); Altasheel Import & Export Enterprises 4.77%; (3.09%) Hamburg Coffee 4.60% (2.32%), Louis Dreyfus 3.89% (5.66%) and Jacobs Douwe Egberts 3.15% (1.59%).

It is important to note that the figures in brackets represent percentage performance in the previous month – April 2022.

“There were changes in relative position of the first ten major buyers reflecting increasing demand for Uganda coffee abroad,” the report says.

Coffee exports by destination

Italy maintained the highest market share of 39.06% compared with 33.12% last month, the report says.

It was followed by Germany 12.64% (13.41%), Sudan 10.74% (14.59%) India 7.27% (7.71%) and Belgium 6.78% (5.70%).

Note: The figures in brackets represent percentage market share held in April 2022.

Coffee exports to Africa amounted to 70,782 bags, a market share of 16% compared to 90,076 bags (23%) the previous month. African countries included Algeria, Sudan, Morocco, Tunisia, South Africa, South Sudan, and Kenya. Europe remained the main destination for Uganda’s coffees with a 66% imports share higher than 58% in April 2022.

Local Situation

UCDA says during the month of May 2022, farm gate prices ranged from Sh.2,400-2,800/= per kilo of Kiboko (Robusta dry cherries); Shs. 6,200-6,700/= for FAQ; Sh. 10,000- 11,000/= for Arabica parchment; and Sh.,9,000-10,000/= per kilo for Drugar from Kasese. Robusta Kiboko averaged UGX 2,600/= per kilo; FAQ UGX 6,450/= per kilo, Arabica parchment UGX 10,500/= per kilo and Drugar UGX 9,500/= per kilo.