By Nelson Mandela Muhoozi
On Wednesday, Robusta coffee futures on the London International Financial Futures and Options Exchange (LIFFE) closed the day on a negative note, with 70.62% of the earlier losses sustained.
Similarly, the New York coffee market also ended the trading day negatively, retaining 60.54% of its losses.
The January Robusta contract closed at sh16,352,888 per ton (about $4,425), reflecting a loss of sh288,300 ($78) from the previous close.
Meanwhile, the March position dropped to sh16,023,498 per ton (about $4,335), down $258,000 ($70).
On the International Commodity Exchange (ICE), Arabica coffee futures also posted declines. Rainfall in Brazil, the world’s largest coffee producer, eased drought concerns, pushing down prices as more rain is expected in key growing regions like Minas Gerais.
Exchange data indicated that these weather conditions have improved soil moisture levels, reducing fears of prolonged production disruption.
The December Arabica contract fell by 1.85 US cents, closing at 249.85 US cents per pound, while the March position lost 1.70 US cents, closing at 248.75 US cents per pound.
Dr Michael Mugabira, a prominent figure in the coffee sector, remarked that the declining global coffee prices reflect broader challenges faced by coffee markets as weather disruptions in major growing regions continue to affect production and pricing.
He noted that Uganda, which is a significant exporter of Robusta coffee, could see an impact on local prices and export revenues in the coming months.
“Although prices don’t fluctuate drastically, these global trends could influence Uganda’s coffee sector,” Mugabira said.
He also pointed out that with Vietnam and Brazil accounting for a significant share of the world’s coffee supply, any prolonged weather issues in those countries could further disrupt global supply chains, potentially benefiting other producers like Uganda.
“For the past three years, Brazil’s coffee production has been hit by frost issues. When a major producer’s output is reduced, it often means gains for other producers, and that’s the trend we’ve observed,” Mugabira added.
Domestic coffee market
On the domestic front, the Uganda Coffee Development Authority’s (UCDA) report for October 23, 2024, highlighted stable prices for both Robusta and Arabica coffee.
Robusta Screen 15 sold for sh17,115 per kilogram, with a total volume of 3,160 60kg bags being traded.
Farm gate prices
UCDA report also indicated stable farm gate prices across Uganda. Fair Average Quality (FAQ) coffee fetched between sh12,200-13,000 per kilogram, while Kiboko coffee fetched between sh6,000-sh7,000 per kilogram.
Arabica parchment prices ranged from sh12,000-12,500 per kilogram, while clean Drugar coffee was sold for between sh11,500-12,000 per kilogram.
