Why Uganda’s Coffee Exports Have Declined

by Business Times writer
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Uganda’s coffee exports witnessed a decline in February 2024 compared to the same month last year.

As highlighted in the February 2024 report released by the Uganda Coffee Development Authority (UCDA), coffee exports in February 2024 amounted to 434,582 60-kilo bags, totaling USD 82.56 million.

Specifically, Robusta comprised 372,407 bags valued at USD 68.58 million, while Arabica consisted of 62,175 bags valued at USD 13.98 million.

Compared to the same period last year, there was a decrease of 9.36% in quantity but a 25.06% increase in value. 

When looking at the coffee exports by type in February 2023, there was a slight decrease of 0.52% in the quantity of Robusta, but its value surged by 53.16%. Meanwhile, Arabica exports experienced a significant drop of 40.83% in quantity and 34.18% in value.

“The monthly coffee export volume was lower than the previous year and this was more pronounced in Arabica coffee due to a small harvest in Elgon region which was as a result of drought that affected yields,” the UCDA report reads.

The value of the coffee exports was however higher than last year and this, according to UCDA, was due to the prevailing high global coffee prices.

“Coffee exports for the twelve months (March 2023-February 2024) totaled 6.06 million bags worth USD 999.80 million compared to 5.75 million bags worth USD 859.40 million in the

previous year (March 2022-February 2023). This represents an increase of 5% and 16% in quantity and value respectively,” the report reads.

Coffee Exports By Destination

Italy maintains its position as the primary destination for Uganda’s coffee exports.

“Italy maintained the highest market share with 37.74% compared to 41.80% last month of January. It was followed by India at 11.11% from 9.77% recorded in January, Sudan 9.50% from 3.63%, Germany 9.08% from 13.39% and U.S.A 4.31% from 4.38% registered in January”

The first 10 major destinations of Uganda coffee took a market share of 87.23% compared to 89.64% last month.

Coffee exports to Africa amounted to 60,948 bags, a market share of 14% compared to 45,094 bags (9%) the previous month.

African nations such as Morocco, Sudan, Algeria, South Africa, Egypt, and Kenya were among the importers of Ugandan coffee. However, Europe continued to be the primary destination for Uganda’s coffee, though its import share decreased to 64% from 72% in January 2024.

Exports By Trade & Grade

“The average export price was US$ 3.17 per kilo, US cents 21 higher than in January 2024 (US$ 2.96). It was 87 US cents higher than in January 2023 (US $ 2.30/kilo).”

Robusta exports accounted for 86% of total exports, higher than 84% in January 2024. 

“The average Robusta price was US$ 3.07 per kilo, 25 cents higher than US$ 2.82 per kilo the previous month. The highest price was Screen 18 sold at US$ 3.35 per kilo and it was followed by Washed Robusta sold at US$ 3.30 per kilo.”

Arabica fetched an average price of US$ 3.75 per kilo – US cents 4 higher than the previous month of January.

The highest price was for Mt. Elgon PB sold at US$ 8.71 per kilo. It was followed Organic Bugisu sold at US$ 7.11 per kilo. Drugar was sold at US$ 3.75 per kilo, 41 cents higher than 3.34 per kilo last month, and was US cents 21 lower than Bugisu AA.

This, however, was unprocessed coffee, which would earn Uganda much more money if it had been added valued, and exported as processed coffee, confirming Museveni’s endless calls to add value to coffee for export and to stop the exportation of unprocessed goods.

President Museveni has persistently demanded to halt the export of raw Ugandan coffee, citing its preference for foreign interests over the welfare of Ugandan farmers.

Local Situation

During the month of February 2024, farm gate prices ranged from Shs. 5,000 to shs. 5,500 per kilo of Kiboko (Robusta dry cherries); Shs.10,000 to 11,000 for FAQ (Fair Average

Quality); Sh. 11,000 to 12,000 for Arabica parchment; and Sh. 10,000 to 11,000 per kilo for Drugar.

Compared to the previous month of January 2024, Robusta Kiboko averaged shs. 5,250 per kilo, higher than shs. 4,250 per kilo, FAQ shs. 10,500 per kilo higher than shs. 9,750, Arabica parchment at shs. 11,500 per kilo higher than shs. 10,500 per kilo and Drugar shs. 10,500 per kilo higher than shs. 9,750per kilo.

Foreign Buyers Of Uganda Coffee

The top 10 buyers held a market share of 57% lower than 65% in the previous month.

“Olam International led with a market share of 11.48% compared to 9.94% in January 2024 2023. It was followed by Louis Dreyfus 8.34 (10.35%); Bernhard Rothfos 6.77% (4.71%); Sucafina 6.25% (12.60%); Ecom Agro Industrialist 6.07% (3.28%); Volcafe 4.91% (5.95%); Touton SA 4.10%; (3.87%) Eurocafe SRL 3.62% (5.88%); Strauss 2.98% (2.21%); and Hamburg Coffee 2.98% (4.17%).”

The figures in brackets represent percentage performance in the previous month – January 2024.

“Changes in the relative positions of the first 10 major buyers reflects continued demand for Uganda coffee abroad,” said UCDA.

Global Situation

World coffee production for 2023/24 is forecast to reach 171.4 million bags, 6.9 million bags higher than the previous Year of 164.5 million bags, with higher output in Brazil, Colombia and Ethiopia expected to more than offset reduced production in Indonesia. Global exports are expected to increase by 8.4 million bags to 119.92 million bags, mainly due to strong shipments from Brazil,” the UCDA report reads.

Global consumption is forecast at 169.5 million bags, with the largest increase in the European Union, the United States of America and Brazil.

Outlook For March 2024 

“Coffee exports are projected to be 430,000 bags. Harvesting of the main crop north of the equator and the fly crop in South western and Greater Masaka is tailing off. The harvest season

of the main crop in Masaka and South Western regions is expected to start in April.”

Impact On The Economy

Coffee is a major contributor to Uganda’s economy, with exports accounting for a substantial portion of foreign exchange earnings and employment opportunities.

The decrease in export quantity could lead to reduced revenue and potential income loss for coffee farmers, affecting their livelihoods and rural communities dependent on coffee production. 

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