By Nelson Mandela Muhoozi
The London International Financial Futures and Options Exchange (Liffe) reports that Robusta coffee prices have been impacted by fears of excessive dryness in Vietnam.
This dryness is expected to damage coffee crops, potentially reducing future global Robusta production.
For September, the Robusta position closed at $4,583 (sh16,980,015) per ton, a decrease of $34 (sh125,970). The November position closed at $4,397 (sh16,290,885) per ton, down $44 (sh163,020) from the previous close.
Meanwhile, the Intercontinental Exchange (ICE) reports a decrease in Arabica coffee prices, driven by increased rainfall in Brazil.
This precipitation has alleviated concerns about dryness in the region. Somar Meteorology indicated that Brazil’s Minas Gerais region received 4.6 mm of rain last week.
The September position for Arabica closed at 242.15 cents per lb (pound), a drop of 6.60 cents, while the December position closed at 240.40 cents per lb, down 6.40 cents from the previous close.
According to the Uganda Coffee Development Authority (UCDA), Robusta Coffee Screens 15 and 18 sold the highest volumes of 60-kilo bags at 4,562 and 3,400, respectively, as per the daily coffee market analysis report for July 16, 2024.
June market report
According to the June market report, a total of 667,037 60-kilo bags of coffee valued at $162.36 million were exported in June 2024 at an average price of $4.06/kilo, $ cents 35 higher than $3.27/Kilo in May 2024, and $1.38 higher than $2.68/kilo in June 2023.
This was an increase of 18.24% and 79.14% in quantity and value respectively compared to the same month last year.
Farm-gate prices for Robusta Kiboko averaged sh5,650 per kilo; FAQ (Fair Average Quality) sh12,250 per kilo, Arabica parchment sh12,750 per kilo and Drugar sh11,500 per kilo.
Coffee exports for twelve months (Financial year 2023/24) totaled 6.13 million bags worth $1.14 billion compared to 5.76 million bags worth $846.02 million in the previous year (Financial year 2022/23).
This represents an increase of 6.33% and 35.29% in quantity and value respectively. About 67% of the total volume was exported by 10 exporters, out of 61 companies which performed during the month compared to 72% in May 2024. Sustainable Arabica fetched the highest price at $5.30 per kilo.
Coffee exports
Coffee exports in June 2024 amounted to 667,037 60-kilo bags, worth $162.36 million. This comprised of 614,486 bags of Robusta valued at $149.95 million and 52,551 bags of Arabica valued at $12.42 million.
This was an increase of 18.24% and 79.14% 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 Year (June 2023), Robusta increased by 25.51% and 102.97% in quantity and value respectively, while Arabica exports decreased by 29.51% and 25.90% in quantity and value respectively.
The monthly coffee exports volume was higher than the previous year and this was seen in Robusta exports as the newly harvested bigger crop from Greater Masaka and Southwestern regions reached the market.
Arabica exports were however lower than last year due to a smaller harvest in Elgon region. Coffee exports for twelve months (Financial year 2023/24) totalled 6.13 million bags worth $1.14 billion compared to 5.76 million bags worth $846.02 million in the previous year (Financial year 2022/23).
This represents an increase of 6.33% and 35.29% in quantity and value respectively.
Coffee exports by destination
In terms of exports by destination, Italy maintained the highest market share with 41.96% compared to 44.66% last month.
It was followed by Germany 10.55% (9.68%), India 7.41% (9.68%), Sudan 6.87% (2.52%) and Spain 5.40% (4.63%).
The first 10 major destinations of Uganda coffee took a market share of 88.83% compared to 90.58% last month.
On the other hand, coffee exports to Africa amounted to 79,433 bags, a market share of 12% compared to 24,583 bags (6%) the previous month.
African countries that imported Uganda coffee included Sudan, Morocco, Egypt, Algeria, Kenya and South Africa. However, Europe remained the main destination for Uganda’s coffees with a 69% imports share, lower than 71% in May 2024.
Global situation
According to the Directorate of Strategy and Business Development, UCDA, world coffee production for 2024/25 is forecast to rebound 7.1 million bags from the previous year to 176.2 million due primarily to continued recovery in Brazil and rebounding output in Indonesia.
With additional supplies, global exports are expected up 3.6 million bags to 123.1 million primarily on strong shipments from Indonesia and Brazil according to Intercontinental coffee exchanges.
Ending stocks are also expected to rise by 1.9 million bags to 25.8 million following 3 years of decline according to the United States Department of Agriculture, Coffee: World Markets and Trade report-for June 2024.
Local situation
Locally, during the month of June 2024, farm gate prices ranged from sh5,500-5,800 per kilo of Kiboko (Robusta dry cherries); sh12,000- 12,500 for FAQ (Fair Average Quality); sh12,500- 13,000 for Arabica parchment; and sh11,000-12,000 per kilo for Drugar.
Compared to the previous month, Robusta Kiboko averaged sh5,650 per kilo, lower than sh5,750 per kilo, FAQ sh12,250 per kilo and parchment sh12,750 per kilo the same as the previous month and Drugar sh11,500 per kilo lower than sh10,750 per kilo the previous month.
Outlook for July 2024
According to UCDA, coffee exports are projected to be 650,000 60-kilobags. Meanwhile, the Authority said, harvesting of the main crop south of the equator (Masaka and Southwestern regions) has peaked.
Today’s coffee market prices in $ cents per Lb(pound)
Screen 18- 112.19
Robusta – Screen 15- 107.19
Robusta – Screen 12 – 104.19
Arabica – Bugisu AA 231.40
Arabica – Bugisu A 230.40
Arabica – Bugisu PB 230.40
Arabica – Bugisu B 228.40
Arabica – Wugar 229.40
Arabica – Drugar 210.40
Note: Price (sh/kilo), Exchange rate (1$=Sh3,705)
Coffee farmgate price range in sh/kilo
| Category of coffee | FAQ (Fair Average Quality) | Kiboko | Arabica parchment | Drugar coffee (clean) |
| Price Range | 6000-6500 | 2500-3000 | 10,000-11,000 | 9000-10,000 |
