By Nelson Mandela Muhoozi
The global coffee market experienced a turbulent session with the London International Financial Futures and Options Exchange (LIFFE) taking a significant hit, while the International Commodity Exchange (ICE) in New York remained closed for the Labour Day holiday.
In London, Liffe Robusta futures faced intense selling pressure, leading to substantial losses across key positions.
According to the daily coffee market analysis report, the November position closed at $4,700 (shillings 17.488 million) per tonne, marking a steep decline of $248(shillings 922,808), while the January position ended at $4,489 (shillings 16.7 million) per tonne, down by $240 (shillings 893,040) from its previous close.
These losses erased most of the gains made earlier in the week, reflecting a volatile trading environment driven by market uncertainties.
Martin Maraka, the chief executive officer of Uganda Coffee Federation, said that last week, the markets were tight due to drought issues and the fear to comply with the European Union Regulation on Deforestation Free Products (EUDR).
However, he said that today’s market analysis that depicted selling pressure could be arising from still drought fears, Brazil’s supplies being rough, but also beliefs that some country is likely to cover up the gap.
Meanwhile, the New York’s International Commodity Exchange (ICE) Arabica coffee futures was closed in observance of the Labor Day holiday.
The latest figures, based on Friday’s closing, showed that the December position for Arabica had closed at $2.4405 (about shillings 9,081) per pound, down by 3.55 US cents, while the March position settled at $2.421 (about shillings 9,009) per pound, losing 3.10 US cents.
The contrasting performances highlight the sensitivity of coffee futures to market pressures, with Robusta’s losses pointing to a potential shift in market dynamics.
Investors will be closely watching the reopening of the New York market to gauge the impact on Arabica prices.
Comparatively, Bernard Sabiti, a coffee farmer and exporter from Besmark Coffee Company Ltd said that prices are high externally in foreign markets but internally low.
“The Government failed to implement the EUDR regulations in time but now its biting us because EU buyers are not buying. About 80 per cent of Ugandan Coffee exporters are not buying coffee from farmers due to the regulation. We are just waiting for the farmers to be registered so that we can start, and this is why prices are low internally. Let the government act quickly because they delayed releasing funds for farmer registration,” he said.
While the Minister of Agriculture, Animal Industry and Fisheries, Frank Kagyigyi Tumwebaze recently asked farmers not to panic over compliance with the EU regulations, Sabiti asked why the sector should not be panicking when they don’t see progress in farmer registration.
“The Government is saying don’t panic. But how do you comply when nothing is going on. There is need for the government to expedite quickly the process of farmer registration,” he said.
According to Uganda Coffee Development Authority (UCDA), Robusta Screen 18 registered the highest price at $2.2793 per pound with a volume of 1,560 of 60kg bags of coffee, followed by Robusta Screen 15 at $2.1659 at volumes of 3,840 of 60kg bags. Robusta Screen 12 registered $2.1600 and sold 1,720 of 60kg bags of coffee.
September 3, 2024, coffee market prices in $ cents per Lb (pound)
Screen 18 229.53
Robusta – Screen 15 224.53
Robusta – Screen 12 221.53
Arabica – Bugisu AA 239.05
Arabica – Bugisu A 238.05
Arabica – Bugisu PB 238.05
Arabica – Bugisu B 236.05
Arabica – Wugar 237.05
Arabica – Drugar 218.05
Price (sh/kilo), Exchange rate (1$=Sh3,721)
Week’s coffee farmgate price range in sh/kilo
| Category of coffee | FAQ (Fair Average Quality) | Kiboko | Arabica parchment | Drugar coffee (clean) |
| Price Range | 12,500-13,500 | 6,500-7,000 | 13,000-13,500 | 12,000-13,000 |
