Kampala, Uganda | THE INDEPENDENT | Ugandan coffee dealers are halting exportation of hundreds of tons of coffee to see if the global coffee prices will improve.
As a result, Uganda’s coffee earnings dropped by 25% from $46.3m (Shs 169bn) in August to just $34.7m (Shs 125bn) in September 2019.
According to the Ministry of Finance report on performance of the economy for October 2019, coffee earnings fell because there was a decline in the volumes Uganda shipped in September.
The ministry said the low global coffee prices compelled exporters to stock up inventory hence the decline in the volume of coffee exported. Uganda only exported 360,000 bags (60kgs) of coffee in September, down from 490,000 bags exported in August.
Coffee prices have fallen sharply with the oversupply on the market this year. Top producers like Brazil, Vietnam, and Colombia had glut production this year.
The international coffee organisation shows that total coffee shipments around the world in the first ten months of 2018/19 reached 109.4 million bags – 10.2% higher than the same period last year.
The coffee agency says global coffee production is up fueling exports and depressing prices.
Locally, dealers are quoting a kilogramme of robust dry cherries at Shs 1,000 down from Shs 2,300 a year ago.
The Uganda Coffee Development Authority (UCDA) is quoting Kiboko at Shs 2,000-2,300 per kg while Arabica parchments at 4,000 to 4,400 per kg. The farmer does not receive this fare as much it goes to the middlemen.
Adam Levin, a dealer with Afriport International, said while they expect a rebound in prices, rains is affecting the drying of the coffee locally.
He said the wetting of coffee by rain can reduce the quality and even ruin it. This means even when the prices recover, Uganda’s coffee might still fetch less money because of poor quality. Low prices also mean farmers reduce on inputs and maintenance of coffee trees.
In April 2019, UCDA said coffee exports earnings for the period between April 2018 and April 2019 fell to US$418m (Shs1.5 trillion).