Uganda’s coffee sector sees mixed fortunes amid global market shifts

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Uganda’s coffee market is grappling with a volatile international environment, as global futures for both Arabica and Robusta beans posted mixed trends amid changing currency dynamics and supply outlooks.

Meanwhile, domestic farm-gate and wholesale prices remain resilient, offering farmers steady returns even as experts call for urgent government intervention to position Uganda as a global coffee powerhouse.

Robusta coffee futures dip on LIFFE

According to market data released by the Ministry of Agriculture, Animal Industry and Fisheries (MAAIF) on Monday, May 12, 2025, Robusta coffee futures on the London International Financial Futures and Options Exchange (LIFFE) saw a sharp drop, reflecting the widening arbitrage between the London and New York markets.

The July 2025 contract closed at $5,226 (about sh19,102,830) per metric tonne, down $39 (about sh142,545) from the previous close, while the September contract fell to $5,181 (about sh18,935,355), a loss of $32 (approximately sh116,960).

The arbitrage gap widened to 150.71 US cents per pound, representing a 38.87% discount for London Robusta against its New York counterpart.

Arabica futures firm despite supply concerns

In contrast, Arabica coffee futures on the International Commodity Exchange (ICE) edged higher, supported by a weakening US dollar.

The July position closed at 387.75 US cents per pound, up 0.45 cents, while the September contract gained 0.65 cents to settle at 382.45 cents.

However, gains were capped by expectations of increased output from key producers. The US Department of Agriculture (USDA) forecasts Honduras' 2025/26 harvest will rise 5.1% to 5.8 million 60-kilogramme bags, signalling a looser global supply outlook.

Domestic market prices hold strong

Despite global uncertainty, Uganda’s coffee maintained strong pricing at home, driven by continued demand.

According to MAAIF’s market report, Robusta Screen 18 fetched sh20,418 per kilogramme, Robusta Screen 15 sold at sh20,015, and Robusta Screen 12 traded at sh19,773.

Arabica coffee continued to command a premium, with Bugisu AA trading at sh30,841 per kilogramme, and Bugisu A following closely at sh30,761.

In terms of volumes sold, Robusta Screen 15 led the pack with 15,410 sixty-kilogramme bags, followed by Robusta Screen 18 at 6,520 bags, and Screen 12 at 1,280 bags.

Farm-gate prices remain competitive

Farmers continued to earn reasonably well at the farm-gate level, with FAQ Robusta selling between sh15,000–15,500, Kiboko Robusta ranging between sh7,000–7,700, and Arabica parchment trading between sh14,000–15,000. Drugar sold at sh15,000–15,500.

Uganda’s billion-dollar opportunity

Dr Michael Mugabira, a seasoned coffee farmer and agribusiness analyst, noted that while Uganda’s export volumes remain steady at approximately 6.85 million bags annually, earnings have surged from $1.14 billion (sh4.17 trillion) to $1.84 billion (sh6.72 trillion) over the last two years.

“This growth reflects rising global coffee prices, mainly due to production declines in countries like Brazil and Vietnam,” Mugabira explained.

“But Uganda cannot rely on market forces alone. Strategic government intervention is urgently needed.”

He emphasised that Uganda could overtake Vietnam as a global Robusta supplier if policies are strengthened.

Additionally, he said, “Vietnam’s success wasn’t accidental—it was policy-driven. Uganda has a golden opportunity to replace Vietnam and lift millions out of poverty, as H.E. the President often emphasises. Imagine what we could achieve if the estimated sh7 trillion ($1.92 billion) from coffee exports was harnessed with smart tax policy and sector coordination,” he said.

Steady export growth

The March 2025 Market Report shows that Uganda exported 6.87 million bags of coffee worth $1.84 billion (sh6.73 trillion).

This was up from 5.99 million bags valued at $999.48 million (sh3.66 trillion) in the previous 12-month period. This translates to a 14.86% growth in quantity and an 84.12% rise in export value.

Notably, 68% of Uganda’s coffee exports were handled by 10 leading exporters among 80 active companies in March, slightly down from 71% in February.

The highest price was fetched by Mt Elgon A+, which traded at $8.18 per kilogramme (sh29,921), setting a benchmark for premium quality coffee in international markets.

“The strong performance of Uganda’s coffee exports (both in terms of trade volumes and earnings), can largely be attributed to supply shortages in major producers like Brazil and Vietnam, coupled with a surge in global demand,” said Martin Maraka, chief executive officer of the Uganda Coffee Federation.

On his part, Bernad Sabiti, an expert from Besmark Coffee Company, explained that global forecasts of reduced coffee production, particularly in Brazil due to insufficient rainfall and a shortfall in Robusta supplies from Vietnam, could trigger another spike in international prices.

“These developments present a real opportunity for Ugandan coffee farmers to earn better prices this season,” he noted.

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