Coffee remains a key foreign exchange earner for Uganda
Uganda Coffee Development Authority (UCDA) has revealed that the country’s coffee exports in October 2023, amounted to 470,080 60-kilo bags, worth US$ 78.96 million (Shs298.481Bn).
This comprised of 410,113 bags of Robusta valued at US$ 66.87million (Shs252.779Bn) and 59,967 bags of Arabica valued at US$ 12.10 million (Shs45,739bn).
This was an increase of 3.35% and 18.32% 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 (October 2022), Robusta increased by 3.42% and 26.25% in quantity and value respectively, while Arabica exports increased by 2.86% in quantity but decreased by 12.18% in value.
In its Monthly report for October 2023, UCDA attributes the increase in the monthly coffee exports performance than the previous year to a good crop harvest in South Western region and the prevailing good prices on the global scene which prompted exporters to release their stocks.
Coffee exports for the twelve months (November 2022-October 2023) totaled 6.16 million bags worth US$ 952.24 million compared to 5.83 million bags worth US$ 883.30 million in the previous period (November 2021-October 2022). This represents an increase of 5.57% and 7.81% in quantity and value respectively.
Exports by Type and Grade
According to the report, the average export price was US$2.80 per kilo, US cents 7 higher than September 2023.
It was 35 US cents higher than in October 2022 (US $ 2.45/kilo). Robusta exports accounted for 87% of total exports, lower than 94% in August 2023.
The average Robusta price was US$ 2.72 per kilo, 2 cent higher than US$ 2.70 per kilo the previous month.
“The highest price was Screen 14 sold at US$ 3.20 per kilo. It was followed by Organic Robusta sold at US$ 3.03 per kilo, 20 cents higher than conventional Screen 18,” the report says, adding that the share of Sustainable/washed coffee to total Robusta exports was 2.34% compared to 2.01% in September 2023.
Arabica fetched an average price of US$ 3.36 per kilo compared to 3.11 per kilo last month, US cents 25 higher than US$ 3.14 per kilo realized in September 2023.
The highest price was Bugisu A+ sold at US$ 5.15 per kilo. It was followed by Mt. Elgon A+ sold at US$ 4.41 per kilo. Drugar was sold at US$ 3.31 per kilo, 6 cents higher than 3.25 per kilo last month. This price was US cents 18 lower than Bugisu AA. Drugar exports were 40% of total Arabica exports the same as the previous month. The share of sustainable Arabica exports to total Arabica exports was 4.74% compared to 5.22% in September 2023.
Individual Exporter Performance
The report reveals that Kyagalanyi Coffee Ltd had the highest market share of 16.39% compared to 7.35 % in September 2023. It was followed by Louis Dreyfus Company (U) Ltd 14.01% (8.93%); Ugacof (U) Ltd 10.66% (16.62%); Ideal Quality Commodities Ltd 9.15% (9.37%); Olam Uganda Ltd 7.37% (12.18%); Ibero (U) Ltd 6.86% (7.86%); Touton Uganda Ltd 6.21% (4.75%); Export Trading Company (U) Ltd 6.11% (4.01%); Kawacom (U) Ltd 3.56% (5.76%); and Commodity Solutions (U) Ltd 2.06% (0.17%) .
Note: The figures in brackets represent percentage market share held in September 2023.
According to the report, the top 10 exporters held a market share of 82% higher than 80% the previous month reflecting increasing concentration.
“Changes in exporter positions compared to last month show competition at this level. Out of the 50 exporters who performed, 22 exported Robusta Coffee only while 9 exported Arabica coffee only,” the report says.
Coffee Exports By destination
Italy maintained the highest market share with 28.95% compared to 35.11% last month.
It was followed by Germany 17.19% (22.48%), Spain 9.74% (3.92%), India 7.40% (7.08%) and Algeria 5.56% (4.25%).
Note: The figures in brackets represent percentage market share held in September 2023.
The report says the first 10 major destinations of Uganda coffee took a market share of 87.62% compared to 91.55% last month. Coffee exports to Africa amounted to 90,042 bags, a market share of 19% compared to 104,844 bags (18%) the previous month. African countries that imported Uganda coffee included Sudan, Morocco, Algeria, Tunisia, South Africa, Egypt, and Kenya.
“Europe remained the main destination for Uganda’s coffees with a 68% imports share, slightly lower than 70% in September 2023,” the report reads.
Foreign buyers of Uganda Coffee
The top 10 buyers held a market share of 67% of total exports, lower than 71% the previous month. Louis Dreyfus led with a market share of 13.93% compared to 8.93% in September 2023. It was followed by Sucafina 11.02% (16.56%); Volcafe 8.70% (3.16%); Olam International 7.37% (13.11%); Berhard Rothfos 6.86% (7.85%); Touton SA 6.21% (4.92%); Hamburg Coffee 3.77% (2.98%); GRB 3.52% (3.31%); Ecom Agroindustrial Corp 3.33% (4.53%); and Altasheel Import & Export Enterprises 2.67% (5.09%).
Note: The figures in brackets represent percentage performance in the previous month – September 2023.
The report shows that there were changes in the relative positions of the first 10 major buyers reflecting competition among buyers due to continued demand for Uganda coffee abroad.
Global Situation
World coffee production for 2023/24 is forecast to reach 174.3 million bags , 4.3 million bags higher than the previous Year, with higher output in Brazil and Vietnam expected to more than offset reduced production in Indonesia.
Global exports are expected to increase by 5.8 million bags to a record 122.2 million bags higher than 116.4 million bags the previous year, primarily on strong shipments from Brazil.
Global consumption is forecast at 170.2 million bags, with the largest increase in the European Union, the United States of America and Brazil.
Ending stocks are expected to be 31.8 million bags. (United States Department of Agriculture, Coffee: World Markets and Trade report-June 2023).
Local Situation
During the month of October 2023, farm gate prices ranged from Sh.3,800-4,000/= per kilo of Kiboko (Robusta dry cherries); Shs. 7,500-7,800/= for FAQ (Fair Average Quality); Sh. 9,000- 9,500/= for Arabica parchment; and Sh. 8,000- 8,500/= per kilo for Drugar from Kasese. Robusta Kiboko averaged UGX 3,900 per kilo; FAQ UGX 7,650 per kilo lower than the previous month, Arabica parchment UGX 9,250 per kilo the same as the previous month and Drugar UGX 8,250/= per kilo the same as the previous month last month.
Outlook for November 2023
UCDA says coffee exports are projected to be 500,000 bags.
“The main harvesting season in Central and Eastern regions has started. Exporters will continue to drawdown on their stocks to fulfil contractual obligations with buyers,” UCDA says.
