Uganda's coffee exports fell in March! Government increases funding to boost production is expected to increase sales in China

Recently, the coffee development bureau (UCDA) of Uganda, an African coffee producer, released a coffee export report for March. Uganda's coffee export volume was 329686 bags of 60 kg, 246.8 billion shillings, (US $64.74 million), but this figure was lower than the 434582 bags of 60 kg, 314.7 billion shillings (US $82.56 million) exported in February. It also decreased by 32.4% in quantity and 9.45% in income compared with the same period last year.

The decline in exports in March was due to heavy rains in Africa due to the influence of El Ni ñ o. October to March is the main production season in Uganda, during which heavy rains shot down coffee fruits, which also led to a reduction in the Ugandan harvest. And with the soaring price of coffee, coffee theft in Uganda has increased.

According to the monthly report, the coffee exported in March included 244975 bags of robusta worth US $46.01 million and another 84711 bags of Arabica valued at US $18.72 million. Compared with the same period last year, the number of Robusta coffee beans fell by 33%, while income fell by only 0.24%. In addition, Arabica coffee bean exports fell by 30% and income fell by 26%.

Although coffee exports decreased this month, according to the coffee year (April 2023-March 2024), Ugandan coffee exports reached 5.9 million bags, an increase of 2.42% over the previous year, and income of US $993.63 million also increased by 16.91% over the previous year. In addition, a new round of harvesting has begun in the southwest of the country and is in good condition, with the Coffee Development Bureau (UCDA) forecasting that coffee exports will reach 400000 bags in April.

It is worth noting that the average export price of Robusta in March was US $3.27 / kg, 83 cents higher than the US $2.44 / kg in March 2023. But the washed Robusta is the most expensive, with a price of $4.23.

As Vietnam, the main producer of Robusta, was affected by bad weather, the supply of Robusta coffee was tight, and because of the rise in coffee early, farmers were reluctant to sell their coffee beans, triggering a period of default, leading to a high price of robusta coffee. This has made Uganda profitable, and even though coffee exports fell in March, revenues did not fall much as a result.

According to market research results, Robusta coffee dominates the Italian coffee market, so Italy still maintains the highest market share of Ugandan coffee imports, at 38.08%, followed by India 12.29% and Germany 10.5%.

However, the good news is that the Uganda Coffee Development Authority (UCDA) has applied to the government for 32.5 billion shillings to establish a coffee traceability system, in order to ensure that Ugandan coffee complies with the EU No deforestation regulations (EUDR), and to allocate additional funds for the procurement and deployment of agricultural infrastructure equipment to enhance the level of mechanization of the Ugandan agricultural sector, which can enhance Uganda's agricultural output. And increase more foreign exchange earnings when the current coffee price is high.

In addition, the country's president said earlier that he would strengthen coffee cultivation in Uganda and increase production, hoping to produce 20 million bags by 2025. In addition, due to the increasing demand for coffee in China, coffee consumption is growing by 15% and 20% a year. Uganda hopes to increase its coffee exports to China.