Robusta coffee futures are seeing a notable increase on the London International Financial Futures and Options Exchange (LIFFE), as inventories monitored by the International Commodity Exchange (ICE) have dropped to a four-and-a-half-month low. As of October 4, the current inventory level stands at 4,308 lots, contributing to the upward momentum in prices.
In the latest market update, the November contract for Robusta coffee closed at $5,067 (approximately sh19.1 million) per ton, reflecting a gain of $146 (around sh550,800) compared to previous figures. Meanwhile, the January contract also showed an increase, closing at $4,859 (about sh18.3 million) per ton, up by $139 (around sh524,300).
Arabica coffee futures in New York followed a similar upward trajectory. The latest analysis indicates that tight inventories have also affected this market, with stock levels dropping to a four-month low of 795,874 bags. This situation has triggered short-covering activities among traders. The December position for Arabica coffee settled at 257.35 US cents per pound (approximately sh9,657), a rise of 5.30 US cents. The March position closed at 255.65 US cents per pound (around sh9,598), reflecting an increase of 5.15 US cents.
Despite the gains in coffee futures, the market outlook remains uncertain. John Nuwagaba, a coffee farmer and buyer from Ankole, Western Uganda, expressed caution, stating, “There’s still some volatility in the market.” In contrast, Bernard Sabiti, a coffee farmer and exporter from Besmark Coffee Company Ltd, expressed optimism about future prices, noting that the current pricing trends are favorable and expected to persist. Sabiti also urged the government to expedite the implementation of the European Union’s Regulation on Deforestation-Free Products (EUDR), which is vital for Uganda to comply with new standards in key export markets.
On the local market, the Uganda Coffee Development Authority (UCDA) reported stable farm gate prices. Fair Average Quality (FAQ) coffee is currently priced between sh12,200 and sh13,000 per kilogram. Kiboko coffee prices range from sh6,300 to sh7,000 per kilogram, while Arabica parchment prices are between sh12,000 and sh12,500 per kilogram. Drugar coffee (clean) is sold for sh11,000 to sh12,000 per kilogram.
In its October 7, 2024, Daily Coffee Market Analysis Report, UCDA noted that Robusta Screen 18 prices reached sh19,891 per kilogram, while Robusta Screen 15 sold for sh19,487 per kilogram. Arabica Bugishu AA was priced at sh20,390, with Bugishu A at sh20,309 per kilogram.
Despite facing regulatory challenges, Uganda’s coffee exports have shown consistent growth. In August 2024, UCDA reported a significant increase in coffee exports, amounting to 837,915 bags (60 kg each), valued at $221.63 million (approximately sh819.03 billion). This figure represents a 5.3% rise in revenue from July, highlighting Uganda’s resilience in the global coffee trade.
Dr. Emmanuel Iyamulemye, managing director of UCDA, attributed this growth to the rising demand for Uganda’s Robusta coffee. He emphasized, “The rising demand for instant coffee, particularly in Asia and Africa, has boosted Uganda’s coffee trade.” Reports also indicate that Robusta coffee has gained prominence due to supply constraints in key Arabica-growing regions, such as Brazil.
Robert Byaruhanga, the President of the Uganda Coffee Federation, remains optimistic about the future of Uganda’s coffee industry. He stated, “There’s no doubt that Uganda’s coffee sector is on a solid growth path. If we can continue focusing on quality and sustainability, the future looks bright.”
