By Nelson Mandela Muhoozi
Robusta coffee futures on the London International Financial Futures and Options Exchange (LIFFE) have shown a narrowing arbitrage between the London and New York markets for the November-December 2024 contracts.
The gap currently stands at 19.11 US cents per pound, reflecting a 7.66% price discount for London’s Robusta coffee.
As of the latest session, the November position for Robusta stood at $5,246 (around sh19.63 million) per ton, marking a decrease of $21 (sh78,660) from the previous close.
The January position saw a similar decline, closing at $4,977 (about sh18.61 million) per ton.
Meanwhile, Arabica coffee futures on the Intercontinental Exchange (ICE) also fell, partly due to Brazil’s ongoing drought.
The country’s coffee trees have suffered from insufficient rainfall, which could hurt the 2025/26 Arabica crop.
The December position for Arabica closed at 258.55 US cents per pound, down 0.90 US cents, while the March position settled at 256.10 US cents per pound.
Robert Byaruhanga, President of the Uganda Coffee Federation, stated that global coffee prices are highly affected by climate changes and market fluctuations.
He expects this volatility to persist through 2024, with a potential decline in prices by 2025 due to anticipated strong harvests from Brazil.
Farm gate prices in Uganda for Fair Average Quality (FAQ) coffee ranged from sh12,500 to sh13,000, with Kiboko ranging from sh6,500 to sh7,000.
