Uganda: Global Coffee Prices Hit 12-Year Low

Women sorting and drying coffee beans.
30 October 2018

Global coffee prices closed the year at their lowest in 12 years, leaving producer countries like Uganda distressed with stockpiles.

The situation basically pushes Ugandan coffee farmers deeper into poverty.

Latest statistics from International Coffee Organisation (ICO) indicator prices closed the calendar 2017/18 in September at 98.17 US cents of a dollar down from 124.46 it closed the same time last year.

This performance indicates a 26.5 per cent drop for the ICO composite price while Robusta-Uganda's leading coffee species exported fell 29 per cent in this period from 99 cents of a dollar down to 76 cents of a dollar.

ICO report says: "While coffee consumption is estimated 1.8 per cent higher in coffee year 2017/18 at 162.23 million bags, production exceeded this by 2.58 million bags."

Experts in the industry say, this surplus has contributed to the low prices this season, with the composite indicator averaging 111.51 US cents of a dollar for October 2017 to September 2018.

In comparison, the average for the composite indicator in 2016/17 was 132.43 US cents of a dollar, reflecting the 3.43 million bag deficit that coffee year.

Explaining the low prices in an interview with Prosper Magazine, Mr Emmanuel Iyamulemye, the executive director, Uganda Coffee Development Authority (UCDA) said: "The prices are discouraging the producers. As an organisation we are funded from the cess.

This means our budget is affected and on the side of government, it will get less revenue."

Cess is a levy UCDA gets from the exporters.

He said the exporters have turned to speculation, selling the commodity at lower prices, and stockpiling the coffee.

Iyamulemye said the last time prices fell that much was in 2001 but later they recovered.

He said ICO is engaging roasters and producer countries to escalate the issue.

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