By Nelson Mandela Muhoozi
As October ushers in World Coffee Month, it presents a time to reflect on the coffee trade’s global importance and Uganda’s prominent role within it.
Coffee continues to be a cornerstone of Uganda’s economy, providing livelihoods to millions of farmers while also driving significant export revenues.
World Coffee Day, celebrated on October 1st annually, is a global event that recognizes and promotes the importance of coffee as one of the most consumed beverages in the world.
It was first established by the International Coffee Organization (ICO) in 2015, with the aim to celebrate the journey of coffee from the farms to consumers’ cups and to raise awareness about the challenges faced by coffee farmers, especially in developing countries.
Key reasons for remembering World Coffee Day include appreciating coffee producers, promoting sustainability, celebrating coffee’s cultural impact, raising awareness about industry challenges and fostering community since it’s also a day for coffee lovers to come together and share their passion for coffee through special events, promotions, and gatherings.
Coffee exports
Uganda’s coffee exports have consistently grown, marking the country as one of Africa’s top coffee producers and a key player in global markets.
In August 2024, Uganda’s coffee exports recorded a notable increase, showcasing an upward trend in both value and volume.
According to the Uganda Coffee Development Authority (UCDA), a total of 837,915 60kg bags of coffee, valued at $221.63 million (sh819.03 billion), were exported.
This marks a 5.3% increase from July’s revenues of $210.48 million, which came from 821,593 60kg bags. The August exports primarily consisted of 785,667 bags of Robusta, valued at $208.14 million, while Arabica made up 52,248 bags, valued at $13.49 million.
Compared to August 2023, these figures represent a 13.15% increase in quantity and an 82.98% rise in value.
Global demand
The global demand for coffee has undoubtedly fueled these surges, especially for Robusta coffee, which has gained traction as an affordable alternative to Arabica.
Robusta coffee has increasingly become the backbone of Uganda’s coffee trade. UCDA managing director Dr. Emmanuel Iyamulemye in his recent comments attributed this to several factors, including the rising demand for instant coffee, which primarily uses Robusta beans.
Markets in Asia and Africa, where instant coffee is particularly popular, have driven this demand surge. Robusta’s affordability compared to Arabica, whose supply has been hampered by climate challenges in Brazil and other coffee-growing regions, has made it more attractive to consumers.
“Arabica coffee, known for its superior flavour, has faced supply constraints due to climate issues, leading to higher prices,” Iyamulemye explained.
According to him, these price hikes have led many roasters and consumers to opt for Robusta, especially in markets where affordability plays a key role in purchasing decisions.
Global coffee supply challenges
The broader coffee industry faces its share of challenges, including concerns over dry conditions in Brazil and Vietnam, which are expected to affect coffee yields.
This has led to global price increases, with Uganda benefiting from the rising value of its exports.
The global coffee consumption rate is also climbing, as highlighted by the US Department of Agriculture’s June 2024 coffee report.
In the 2024/25 season alone, coffee consumption is expected to reach 170.6 million bags, a rise of 3.1 million from the previous year.
Uganda’s largest coffee export destination remains Europe, with Italy holding the highest market share at 35.37%, followed by Germany at 20.83%.
Coffee exports to Africa also account for a significant portion, although a slight reduction was noted in August, as Uganda supplied 101,562 bags to African markets.
The impact of EU regulations
Despite Uganda’s thriving coffee trade, new regulations are on the horizon that could impact the coffee market.
On December 5, 2022, the EU, which buys 63% of Uganda’s coffee exports, approved the European Union Deforestation Regulation (EUDR), intended to prevent the trade of products linked to deforestation.
The EUDR requires that coffee producers prove their beans are not sourced from deforested land after December 31, 2020.
In response, the Government has allocated sh13.9b to the Uganda Coffee Development Authority (UCDA) for registration of coffee farmers countrywide ahead of the EUDR deadline.
While this aims to promote sustainability, experts said it also increases production costs, which may eventually trickle down to exporters, roasters, and consumers.
Robert Byaruhanga, the President, Uganda Coffee Federation (UCF) noted that “For European buyers, there are uncertainties about how to comply with the EUDR.
“One way for companies to respond is to secure enough supply before its implementation at the end of this year. So, there is a big incentive to accumulate stocks now leading to rising prices,” he said.
A bright future
Uganda’s coffee sector is currently experiencing a renaissance, largely due to quality improvements, with the country now ranked third globally in coffee quality.
According to UCDA, this success is driven by stringent enforcement of good agricultural practices and post-harvest handling methods, ensuring that Uganda’s coffee remains competitive on the global stage.
