Uganda’s coffee farmers and exporters are having it really good. All the more reason to save money for the proverbial rainy day since bad weather on the other side of the globe is playing a huge part in their happiness.
The total value of coffee exports during 2024 tipped over the one billion dollar mark at $1.14 billion, reportedly the highest earnings in three decades. Just over six million bags were shipped out, a 6.33% increase in volume, but a 35.29% rise in value compared to 2023.
Another major reason for this local cash bonanza was the deliberate policy of the now-defunct Uganda Coffee Development Authority (UCDA) to improve quality.
In the last months before finally being officially absorbed by the agriculture ministry, former UCDA Managing Director, Dr. Emmanuel Iyamulemye Niyibigira said, “The quality of Ugandan coffee has improved significantly due to initiatives by UCDA, which promotes sustainable practices and quality control. Continued adherence to these practices will not only maintain but also elevate Uganda’s standing in the global coffee market.”
According to FAO, the United Nations Food Agency, coffee prices surged by 38.8% in 2024 from their average levels the previous year. FAO says if significant production declines explained by unexpected weather changes continue to occur in key growing areas particularly Brazil and Vietnam, prices may rise further in 2025.
CoffeeTalk, an industry publication says global coffee traders and roasters are reducing purchases due to the record rise in Arabica bean prices, which have increased by 70% over the past year. This has caused problems in the industry and led to product shortages on supermarket shelves.
Arabica, the higher quality coffee variety favored for the roast and ground coffee market, was selling at 58% up on a year ago, while Robusta, used mainly for instant coffee and blending, saw a price surge of 70% in real terms. Uganda is Africa’s top Robusta grower and exporter, and Arabica also grows in the eastern and western highlands. The country grows Robusta and Arabica at a ratio of 4:1.
Consumers are not pleased by this situation. An integral part of their lifestyle is being threatened. In the leading markets of North America and Europe, drinkers of the world’s favorite beverage are growing restless at the way prices keep shooting up in cafes. Italians have already been warned an espresso may cost 60% more during the coming months
Although they miss the ambiance, consumers are now abandoning cafes to drink their coffee at home which is far cheaper. In a panic, last week, the United States National Coffee Association urged President Donald Trump not to impose tariffs on any of their supplier countries or the consequences for their industry may prove dire.
Apart from bad weather, two other factors have contributed to price hikes. FAO says that compared to the same period in 2023, costlier shipping costs during December 2024 caused consumers to pay 6.6 percent more for their coffee in the United States and 3.75 percent more in the European Union.
Pressure on available supplies is also being exerted by rising demand in Asia, traditionally a tea-drinking region. However, many aspects of Western lifestyle are being enthusiastically taken on, especially by young people and coffee drinking is one of them. In South Korea, the number of coffee shops has doubled between 2017 and 2022– from 44,000 to just over 90,000.
According to the International Coffee Organization (ICO), China’s annual consumption has increased by an average of 15% over the past decade. Carl Sara, the Managing Director of Sucafina China says most of the coffees being consumed are not black coffee, but unique mixed beverages developed to meet the interests of the Chinese consumer. These feature add-ins like coconut milk, orange juice, or a tea base.
Sucafina is a leading sustainable Farm-to-Roaster coffee company based in Switzerland, which is also involved in developing Uganda’s Arabica specialty coffee.
According to FAO, frequent imbalances between production and consumption often lead to significant shifts in world prices, which are then passed on to varying degrees to producers and final consumers. In Vietnam, prolonged dry weather caused a 20% drop in coffee production in 2023/24, with exports falling by 10% for the second consecutive year.
Similarly, in Indonesia, coffee production in 2023/24 declined by 16.5% year-on-year on the back of excessive rains in April-May 2023 that damaged coffee cherries. Exports dropped by 23%. In Brazil, dry and hot weather conditions prompted successive downward revisions to the 2023/24 production forecast, with official estimates shifting from an anticipated 5.5 percent year-on-year increase to a 1.6 percent decline.
The ICO says African output increased by 7.1 percent to 1.1 million bags in January 2025 from 1.03 million bags in January 2024, while South America’s exports fell by 4.2 percent to 5.18 million in the same interlude from 5.41 million bags in January 2024.
No one can say how long Uganda’s boon will last. Recently, a Reuters poll predicted that Arabica prices will drop 30% by the end of the year and this coupled with a projected bumper crop from Brazil will substantially cool the market.
However, Volcafe Group, (owners of Kyagalanyi Coffee Limited in Uganda), is less optimistic. Volcafe has reduced its estimate for the 2025/26 Arabica crop by 11 million bags, to 34.4 million bags. This will result in an unprecedented fifth consecutive year of a global supply deficit, of as much as 8.5 million bags, in 2025/26.
In a forecast, Volcafe states: ‘The situation of continuous deficits prevalent since 2021 is largely driven by the inability of Brazil to produce a healthy ‘on-cycle’ Arabica crop back to above 50 million bags, primarily due to climate change.’ Volcafe has also lowered its estimate for the next Robusta crop by 1.5 million bags to 24 million.
The one thing we know about climate change is that we do not know. The extreme weather conditions found in both Brazil and Vietnam can at anytime occur in Uganda as well. Research on how to mitigate climate change and developing the skills and tools for local coffee producers, has been taking place for more than a decade now.
The Ministry of Water and Environment says floods, landslides, droughts, and other extreme weather events are increasing in frequency and intensity. Uganda’s economy is particularly vulnerable to climate change given its heavy reliance on its natural resource base.
Being sentimental about coffee is understandable, but under these circumstances in the long term, it is not sensible. Although the government has been intensifying value-addition export diversification, the millions of small-scale farmers who actually grow Uganda’s coffee, need a workable Plan B. The boon today can become a very distant memory tomorrow.
