What Uganda’s coffee export surge means for the economy?

by Business Times writer
0 comment

Uganda’s coffee exports experienced a significant 22% surge in May 2024, totaling 553,529 60-kilo bags and generating USD 127.30 million.

This comprised of 473,693 bags of Robusta valued at USD 107.92 million and 79,836 bags of Arabica valued at USD 19.38 million. This was an increase of 22.16% and 73.81% in quantity and value respectively compared to the same month last year.

This notable increase underscores the sector’s robust growth and potential for boosting the nation’s economy.

According to the May 2024 coffee report by the Uganda Coffee Development Authority (UCDA), by comparing quantity of coffee exported by type in the same month of last Year (May 2023), Robusta increased by 44.23% and 136.28% in quantity and value respectively, while Arabica exports decreased by 35.98% and 29.68% in quantity and value respectively.

“The monthly coffee exports volume for Robusta was higher than the previous year as the newly harvested main crop from Masaka and South Western regions was at peak,” the report reads.

Arabica exports were however lower than last year due to a smaller harvest in Elgon region.

Coffee exports for the twelve months (June 2023-May 2024) totaled 6.02 million bags worth USD 1.07 billion compared to 5.73 million bags worth USD 839.18 million in the previous year (June 2022-May 2023). This represents an increase of 5.17% and 27.85% in quantity and value respectively

ECONOMIC IMPLICATIONS

Uganda’s economy stands to benefit significantly from this surge in coffee exports.

The 22% increase in Uganda’s coffee exports has profound economic implications. It enhances foreign exchange reserves, contributes to economic diversification, boosts rural incomes, increases government revenue, and attracts investment.

Coffee is a major foreign exchange earner for Uganda, and the increase in exports translates directly into higher foreign currency inflows.

Additionally, the coffee sector employs millions of Ugandans, both directly and indirectly. Increased exports mean higher incomes for farmers, improved livelihoods, and the potential for reinvestment in better farming practices and infrastructure.

The significant increase in coffee export value, particularly of Robusta, which saw a 136.28% rise, indicates that Uganda is enhancing its competitive position in the global market.

Ugandan coffee is on high demand across the world. The destinations for the country’s coffee exports during the month of May 2024 are the biggest economies in Europe, Asia, North America and Africa.

Italy maintained the highest market share of Uganda’s coffee with 44.66% compared to 43.87% registered in April. It was followed by India at 9.68%, Germany (9.68%), Morocco (5.47%), and U.S.A (4.88%).

The first 10 major destinations of Uganda coffee took a market share of 90.58% compared to 86.93% registered in April.

Coffee exports to Africa amounted to 49,909 bags, a market share of 9% compared to 24,583 bags (6%) the previous month of April.

African countries that imported Uganda coffee included Morocco, Sudan, Egypt, Kenya, South Africa, Tunisia, Libya and Algeria.

Europe remained the main destination for Uganda’s coffees with a 71% imports share, higher than 69% in April 2023.

The average export price was USD 3.83 per kilo, 21 cents higher than in April 2024 (USD 3.62), and USD 1.14 higher than USD 2.69 per kilo in May 2023 (USD 2.69).

Robusta exports accounted for 86% of total exports, higher than 74% in April 2024. The average Robusta price was USD 3.80 per kilo, 27 cents higher than USD 3.53 per kilo the previous month.

The highest price was for Organic Robusta sold at USD 4.43 per kilo, followed by Screen 17 at USD 4.00 per kilo.

Arabica fetched an average price of USD 4.05 per kilo, 20 cents higher than the previous month (USD 3.85).

The highest price was Mt. Elgon A+ sold at USD 5.27 per kilo. It was followed by Organic Bugisu sold at USD 4.69 per kilo. Drugar was sold at USD 4.21 per kilo, 30 cents higher than 3.91 per kilo last month, and was US cents 14 lower than Bugisu AA.

Drugar exports were 57% of total Arabica exports higher than 53% the previous month.

The coffee industry is a major source of income for millions of Ugandan farmers, many of whom reside in rural areas. Increased export volumes and higher revenues mean better incomes for these farmers. This leads to improved living standards, greater spending power, and enhanced economic activity in rural regions.

The prosperity in rural areas can stimulate local businesses, create jobs, and reduce poverty levels. Moreover, higher incomes can enable farmers to reinvest in their farms, adopt better farming practices, and increase productivity.

During the month of May 2024, farm gate prices ranged from Shs 5,000-5,800 per kilo of Kiboko (Robusta dry cherries); Shs.10,000-11,000 for FAQ (Fair Average Quality); Sh. 11,000- 12,000 for Arabica parchment; and Sh. 10,000-11,000 per kilo for Drugar.

The coffee sector plays a vital role in Uganda’s economic landscape significantly contributing to the country’s economic growth.

You may also like

Leave a Comment

About Us

Business Times Uganda, is a leading Business news website focusing on Finance, Energy, Infrastructure and Technology. 

Feature Posts

Newsletter

Subscribe our newsletter for latest news. Let's stay updated!

Are you sure want to unlock this post?
Unlock left : 0
Are you sure want to cancel subscription?
error: Content is protected !!