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Uganda’s Coffee Market Update: Prices Surge Amidst Global Climate Concerns

by Jacquiline Nakandi
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By Nelson Mandela Muhoozi

As of November 5, 2024, the global coffee market shows steady price increases, bolstered by weather disruptions in Vietnam and prolonged drought in Brazil, two major coffee-producing countries.

Reports from the London International Financial Futures and Options Exchange (LIFFE) indicate that Robusta coffee futures saw gains as tropical storm Trami moved across Vietnam’s Central Highlands, an important coffee-producing region, bringing intense rainfall.

This caused the January futures position to close at $4,318 (sh15,774,590) per ton, reflecting a $39 (sh142,545) increase, while the March position rose to $4,249 (sh15,511,195) per ton, up $41 (sh149,855) from its previous closing.

In tandem, the International Commodity Exchange (ICE) also reports that coffee prices are benefiting from concerns over potential crop damage due to drought in Brazil.

The December ICE position for Arabica coffee rose to 245.95 US cents (UGX 8,988) per pound, an increase of 3.00 US cents (sh110), while the March position closed at 244.95 US cents (sh8,952) per pound, reflecting a gain of 2.55 US cents (sh93).

Robusta coffee sales up

Meanwhile, the coffee market has shown a consistent demand for Robusta varieties.

According to the November 5 Daily Coffee Market Analysis Report, Robusta screens 18 and 12 led sales, with 2,460 and 1,330 60-kilogram bags sold, respectively. Prices were strong, with screen 18 selling at sh17,099 per pound and screen 12 at sh16,454 per pound.

Stable farm-gate prices

On the domestic front, the Uganda Coffee Development Authority (UCDA) reported steady farm-gate prices, helping maintain confidence among local coffee farmers.

Fair Average Quality (FAQ) coffee was priced between sh12,400 and sh13,000 per kilogram, while Kiboko coffee fetched prices ranging from sh6,000 to sh7,000 per kilogram.

Arabica coffee, which has a smaller but dedicated cultivation area in Uganda’s higher altitudes, also reflected robust prices.

Arabica parchment was priced between sh12,000 and sh13,000 per kilogram, while Drugar coffee (clean) commanded rates between sh11,000 and sh12,000 per kilogram.

Outlook and global mmarket implications

With rising prices on the global market, experts said Uganda’s coffee exports may see a boost in earnings, especially if supply chains remain stable and climate concerns continue to push prices higher.

As the global market remains volatile, they said Ugandan coffee’s competitive pricing and quality standards put it in a favorable position to meet international demand.

The UCDA has also emphasized the need for continued investment in quality improvement and marketing to capture more of the high-value specialty coffee market globally.

Sam Mugabi, chairman of the Ankole Coffee Farmers Union said the sustained upward momentum for Uganda’s coffee market comes as a positive sign for farmers and the local economy, with the sector well-positioned to benefit from both the internal and external forces shaping the global coffee trade.

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