By Nelson Mandela Muhoozi
Robusta coffee futures found support on the London International Financial Futures and Options Exchange (LIFFE), driven by a dip in monitored inventories.
As of Friday, the International Commodity Exchange (ICE)-monitored Robusta coffee inventories hit a 4-1/2 month low, standing at 4,308 lots.
In the same market, the November position for Robusta closed at $5,067 (sh19.1m) per ton, marking a gain of $146 (sh550,800).
Similarly, the January position closed at $4,859 (about sh18.3m) per ton, gaining $139 (sh524,300) from the previous close.
In New York, Arabica coffee futures followed a similar upward trend on the International Commodity Exchange.
Tight inventories in this market, which dropped to a 4-month low of 795,874 bags, spurred short-covering activity according to exchange analysis.
Meanwhile, the December position for Arabica coffee closed at 257.35 US cents per lb (about sh9,657), reflecting a gain of 5.30 US cents. The March position closed at 255.65 US cents per lb (approximately sh9,598), rising by 5.15 US cents.
Outlook from local farmers
Despite the gains, the market outlook remains uncertain, according to John Nuwagaba, a coffee farmer and buyer from Ankole, Western Uganda.
“There’s still some volatility in the market,” Nuwagaba commented.
Bernard Sabiti, a coffee farmer and exporter from Besmark Coffee Company Ltd, however, expressed optimism, noting, “The prices are still good, and we expect the trend to continue.”
Sabiti also called on the government to expedite the implementation of the European Union’s Regulation on Deforestation-Free Products (EUDR), which is essential for Uganda to maintain compliance with new standards in its key export markets.
Local coffee prices
On the local market, the Uganda Coffee Development Authority’s (UCDA) report for the day indicated stable farm gate prices.
Fair Average Quality (FAQ) coffee was priced between sh12,200 and sh13,000 per kilogram, while Kiboko coffee fetched between sh6,300 and sh7,000 per kilogram. Arabica parchment prices ranged from sh12,000 to sh12,500 per kilogram, and Drugar coffee (clean) was sold for between sh11,000 and UGX 12,000 per kilogram.
Meanwhile, according to the October 7, 2024, Daily Coffee Market Analysis Report, Robusta Screen 18 registered a price of sh19,891 per kilogram, while Robusta Screen 15 sold for sh19,487 per kilogram. Arabica Bugishu AA fetched sh20,390, and Bugishu A sold for sh20,309 per kilogram.
Coffee exports on the rise
Despite regulatory challenges, Uganda’s coffee exports have consistently grown. In August 2024, UCDA reported a notable increase in coffee exports, with 837,915 60kg bags of coffee, valued at $221.63 million (sh819.03 billion), exported.
This represents a 5.3% rise from July’s revenue, showcasing Uganda’s strength in the global coffee trade.
Dr. Emmanuel Iyamulemye, Managing Director of UCDA attributed this growth to the increased demand for Uganda’s Robusta coffee.
“The rising demand for instant coffee, particularly in Asia and Africa, has boosted Uganda’s coffee trade,” Iyamulemye stated.
Sector reports also indicate that Robusta coffee, which is more affordable than Arabica, has gained prominence due to supply constraints in key Arabica-growing regions like Brazil.
Robert Byaruhanga, President of the Uganda Coffee Federation, said he is optimistic about Uganda’s coffee industry, especially as the country navigates global regulations and market demands.
“There’s no doubt that Uganda’s coffee sector is on a solid growth path. If we can continue focusing on quality and sustainability, the future looks bright,” he noted.
