East African coffee producers, including Kenya, Uganda, and Ethiopia, are set to benefit from a projected drop in Brazil's coffee output due to a severe drought in the world's top producer.

The drought, which has caused the driest conditions in key agricultural areas since 1981, is expected to curtail Brazil's coffee production, driving global prices higher.

As a result, East African exporters are likely to see increased demand for their coffee, boosting revenues.

In Kenya, coffee prices have risen steadily since the auction resumed last month following a brief recess. A 50-kilogramme bag of Kenyan coffee fetched $246 at the latest sale, up from previous levels, according to market data.

Ethiopia and Uganda, the largest coffee exporters in East Africa, are also poised to capitalise on the situation. Both countries benefited from high prices in 2021 after a severe frost in Brazil cut production.

Ethiopia earned a record $1.43 billion from coffee exports in the 2023/24 fiscal year, according to the Ethiopian Coffee and Tea Authority (ECTA). The country exported 298,500 tonnes of coffee, a 20 percent increase from the previous year's 240,000 tonnes.

In the same period, Uganda recorded its highest foreign exchange earnings from coffee exports in 30 years, the Uganda Coffee Development Authority (UCDA) said in a report.

The country East African nation earned $1.14 billion from coffee exports in the 2023/24 fiscal year, up from $846 million in the previous year. Uganda exported 6.13 million bags of coffee during the period, an increase from 5.76 million bags in the prior year.

From May through August, some of Brazil's key agricultural regions experienced the driest weather in over four decades, according to the country's natural disaster monitoring center, Cemaden.

There is no rain forecast for at least two more weeks, a critical period for coffee trees that typically flower, further exacerbating the expected shortfall in Brazil's coffee production.