Coffee earnings hit record sh212b in a month

Uganda’s coffee closed the month of June with $59m (sh212b) in export earnings, a record high to ever be registered in a single month, as farmers prepare for the main harvest season in July.

The higher export earnings for the period was attributed to a positive trend in global coffee prices in the last two weeks of the month, which prompted exporters to release their stocks.

A total of 618,388 60-kilogramme bags of coffee, worth $59m (sh212b), were exported at an average export price of $1.58 per kilogramme, according to the Uganda Coffee Development Authority (UCDA).

“This comprised 565,449 bags of Robusta valued at $50.25m (sh180b) and 52,939 bags of Arabica valued at $8.31m (sh30b).

This was an increase of 47.04% and 46.63% in quantity and value, respectively compared to the same month last year,” UCDA said in a statement.

Coffee

Robusta exports accounted for 91.44% of total exports, higher than 86.91% reported in May. The average Robusta price was $1.48 per kilogramme, two cents higher than the previous month.

The decrease in the value of Arabica coffee was due to the low volumes exported.

Arabica monthly exports continued to reduce compared to the previous year, attributed to the off-year biennial cycle characteristic of Arabica production.

Farm-gate prices for Robusta Kiboko averaged sh2,250 per kilogramme; FAQ sh4,350 per kilogramme, Arabica parchment sh6,650 per kilogramme and Drugar sh5,750 per kilogramme.

According to UCDA, 78% of the total volume was exported by 10 exporters out of 46 companies that performed during the month compared to 81% in May.

According to UCDA, the top 10 exporters of coffee during the month include Ugacof, holding the largest market share at 19.86%, Ideal Quality Commodities Limited (10.81%), Olam Uganda Limited (10.15%), Touton Uganda Limited (7.44%) and Kawacom (U) Limited (6.24%).

Others are Louis Dreyfus Company (U) Limited (5.90%), Kyagalanyi Coffee Limited (5.60%), Ibero Limited (5.17%), Exporting Trading Company Limited (4.24%) and Besmark Coffee Company Limited (3.04%).

Italy was the highest destination for Uganda coffee, followed by Germany, India, Sudan and Algeria.

FISCAL YEAR PERFORMANCE

Coffee exports for 12 months (financial year 2020/21) totalled 6.08 million bags, worth $559.26m, compared to 5.11 million bags, worth $496.28m, the previous F/Y 2019/20.

The coffee sector performance for the 2020/21 fiscal year represents an increase of 19% and 13% in both quantity and value, respectively.

The quantity of coffee exported in June is the highest in a single month, while the total quantity of exports in the last 12 months is the highest in 30 years.

However, currently, coffee value addition entails off-farm processing, export grading and marketing with limited roasting and consumption.

A large percentage of coffee is exported to re-exporting countries. Over 95% of coffee is exported as raw unprocessed beans, which has seen Uganda’s earnings from the cash remain a lot lower over the years.

JULY OUTLOOK

In July, UCDA projects that at least 31,612 bags will be added on the back of low harvest from Brazil and Vietnam, the two largest coffee producers, accounting for roughly 20% of the world coffee production.

“Coffee exports are projected to be 650,000 bags as the main harvesting period in greater Masaka and southwestern regions reaches its peak during the month.

Dry weather, coupled with some rains, will speed up ripening and procurement of the coffee from the countryside,” UCDA said.

“Increased exports are also likely to be driven by increasing global coffee prices exhibited in the last two weeks of the previous month on account of reduced harvest from Brazil and Vietnam, which will stimulate exporters to also release their stocks,” UCDA added.