Coffee is Uganda’s top foreign exchange earner
Uganda’s coffee exports in July 2022 amounted to 576,468 60-kilo bags worth US$ 83.52 million (UShs320.9bn), according to Uganda Coffee Development (UCDA)’s monthly report for July 2022.
The report says this comprised 528,235 bags of Robusta valued at US $71.53 million and 48,233 bags of Arabica valued at US$ 11.99 million.
This was a decrease of 17.57% in quantity but an increase of 19.56% 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 (July 2021), Robusta decreased by 19.91 % in quantity but increased by 13.92% in value.
Arabica exports increased by 21.24% and 69.70% in quantity and value respectively.
UCDA mainly attributes the decrease in Robusta exports to lower yields this year that were characterized by drought in most regions.
“This led to a shorter main harvest season in Central and Eastern regions and reduced harvests from Greater Masaka and South-Western regions,” the report says, adding: “The increase in Arabica coffee exports is due to an on-year cycle characteristic of Arabica coffee production.”
Meanwhile, coffee exports for 12 months (August 2021- July 2022) totaled 6.14 million bags worth US$ 875.95 million compared to 6.23 million bags worth US$ 578.77 million the previous year (August 2020-July 2021). This represents a decrease of 1.57% in quantity but an increase of 51.35 % value.
Exports by Type and Grade
The report shows that the average export price was US$ 2.41 per kilo, 22 U.S cents lower than US$ 2.63 per kilo realized in June 2022. It was 75 US cents higher than in July 2021 (US $ 1.66/kilo). Robusta exports accounted for 92% of total exports higher than 84% in June 2022.
The average Robusta price was US$ 2.26 per kilo, 3 cents lower than the previous month. Organic Robusta and washed Robusta fetched the highest price of US$ 2.46 per kilo. They were followed by Screen 17 at US$ 2.42 per kilo.
“Screen 17 was 14 cents higher than Screen 15 concretizing government policy of expanding exportable grades,” the report says, adding that the share of Sustainable/washed coffee to total Robusta exports was only 1.09%.
Arabica fetched an average price of US$ 4.14 per kilo, 27 cents lower than in June 2022. The highest price was Organic Okoro sold at US$ 5.75 per kilo a premium of US cents 95 over conventional Bugisu AA, and was followed by Wugar sold at US$ 5.55 per kilo,. Drugar was sold at US$ 4.18 per kilo, a discount of US cents 62 from Bugisu AA.
Drugar exports were 41% of total Arabica exports compared to 61% the previous month.
The share of sustainable Arabica exports to total Arabica exports was 5%.
Individual Exporter Performance
Ugacof (U) Ltd had the highest market share of 11.12% compared to 15.33% in June 2022. It was followed by Ideal Quality Commodities Ltd 11.56% (10.86%); Olam Uganda Ltd 10.99% (8.91%) Kyagalanyi Coffee Ltd 8.40% (9.79%); Louis Dreyfus Company (U) Ltd 7.48% (7.07%) Touton Uganda Limited 7.48% (4.38%); Ibero (U) Ltd 6.04% (5.17%); Kawacom (U) Ltd 5.64% (5.29%); Besmark Coffee Company Limited.4.79% (2.19%); and Export Trading Company (U) Ltd 3.69% (2.18%).
Important to note is that the figures in brackets represent percentage market share held in June 2022.
The top 10 exporters held a market share of 78% higher than 74% the previous month. There were changes in positions compared to last month reflecting competition at the exporter level, the report says.
Out of the 54 exporters that performed, the report says, 23 exported Robusta Coffee only while 5 exported Arabica coffee only.
Coffee exports by destination
Italy maintained the highest market share of 40.62% compared with 40.25% last month. It was followed by Sudan 13.78% (10.35%), Germany 8.77% (13.34%) India 6.48% (7.42%) and Belgium 5.38% (3.71%).
Notably, the figures in brackets represent percentage market share held in June 2022.
Coffee exports to Africa amounted to 118,694 bags, a market share of 21% compared to 109,506 bags (21%) the previous month. African countries that imported Uganda coffee included Algeria, Sudan, Morocco, South Africa, and Kenya.
“Europe remained the main destination for Uganda’s coffees with a 61% imports share lower than 65% in June 2022,” the report reads in part.
Foreign buyers of Uganda Coffee
The top 10 buyers held a market share of 65% of total exports lower than 67% the previous month. Olam International led with a market share of 12.35% compared to 16.21% in June 2022. It was followed by Sucafina 10.25% (15.33%); Louis Dreyfus 7.54%;(5.60%); Touton Geneve 7.09% (4.38%) Bernhard Rothofos 6.04% (5.81%); Volcafe 5.49% (7.85%); Altasheel Import & Export Enterprises 5.04%; (12.20%) Ecom Agro industrialist 4.95% (4.84%), Hamburg Coffee 3.45% (4.33%) and Cofftea(Sudan) 2.67% (1.45%).
It is important to note that the figures in brackets represent percentage performance in the previous month – June 2022.
There were changes in relative position of the first ten major buyers reflecting increasing demand for Uganda coffee abroad.
Global Situation
According to the report, world coffee production for 2022/23 is forecast to increase by 7.8 million bags to 175 million bags from the previous year, as Brazil’s Arabica crop enters the on year of the biennial production cycle.
Global consumption is expected to increase by 1.81 million bags to 167 million with the largest increase in European Union, United States, Japan and Brazil.
World exports are forecast to be higher on gains in Brazil and Indonesia. Ending stocks are expected to be 2.1 million bags higher than last year to 34.7 million bags following last year’s sharp drawdown. (United States Department of Agriculture, Coffee: World Markets and Trade report).
Local Situation
During the month of July 2022, farm gate prices ranged from Sh.2,000-2,500/= per kilo of Kiboko (Robusta dry cherries); Shs. 6,000-6,500/= 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 2,250/= per kilo; FAQ UGX 6,250/= per kilo, Arabica parchment UGX 10,500/= per kilo and Drugar UGX 9,500/= per kilo.
Outlook for August 2022
Coffee exports are projected to be 500,000 bags, the report says.
“The main harvesting period season in Greater Masaka and South western regions will begin to tail off. It was affected by a dry spell especially in Bukomansimbi and Sembabule districts. Exporters will draw down their stocks to fulfil contractual obligations with the buyers,” the report says.
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