Kampala- Global movements continue to impact local prices in the coffee sector with dealers facing low demand and returns.
Local dealers are quoting the a kilogramme of Robusta dry cherries at Shs1,500 up from Shss2,300 about a month ago, indicating a 53 per cent drop.
However, according to National Union of Coffee Agribusiness and Farm Enterprises (Nucafe), the movements have had a lesser impact on own and sell graded coffee that is currently being quoted at an average of Shs6,800.
Mr Emmanuel Iyamulemye, the Uganda Coffee Development Authority (UCDA) executive director, said yesterday “the price is bad” and exporters have been monitoring the market that has in the last few days witnessed “few movements”.
Uganda is Africa’s leading coffee exporter with about 4.6 million 60-kilogramme bags worth $508m (Shs1.9 trillion) exported annually.
Mr Joseph Nkandu, the Nucafe executive director, told Daily Monitor yesterday the prices are not the best right now, which has forced some farmers to hold onto their stocks.
“We are holding on to stocks for a while until the prices get better. When this happens then we shall be able release the stock,” he said.
Uganda currently exports 4.6 million 60-kilograme and is expected to increase to 20 million by 2025.
Coffee production is expected to grow rapidly because of increased production in non-coffee areas.
For instance, UCDA has in the last five years superintended the plantation of more than 500 million seedlings, spreading coffee farming, according to Mr Iyamulemye, to new areas such as northern Uganda, parts of Busoga and greater Bunyoro.
International coffee prices have continued to move southwards, touching the lowest levels in over 11 years.
In July, prices of coffee globally decreased, indicating a fall of 4 per cent to $110.54.
This has resulted in some major exporters staying away from the market.
By close of business yesterday, International Coffee Organisation (ICO) indicated that composite indicator was trading at $102.36 much lower than it cost in July at an average of Shs107. 20.
“Coffee prices have fallen consistently over the course of the coffee year 2017/18, with declines recorded in seven out of the last 10 months,” the International Coffee Organisation, indicates.
The monthly average of the ICO composite indicator fell by 2.9 per cent to $107.20 in July, representing the lowest monthly average for July since 2007.