Uganda coffee fetches $48.6 million in just two months

Uganda’s coffee export volumes increased to 446,286 bags, bringing in Ush86.5 billion ($48.6 million) in the past two months as stocks of the world’s second most traded commodity ran out globally.

Compared with same months in the previous year (2007/2008), this year’s earnings shot up in value by $10 million.

In 2007/2008, over the same months, the country exported 371,440 bags valued at $38.6, according to the monthly reports from Uganda Coffee Development Authority (UCDA).

UCDA attributes the surge to the harvesting and marketing of the 2008/2009 coffee crop, which has has received favour from good weather and fair prices in international markets. Coffee reaching the export grading factories was also of very good quality and desirable moisture content.

Coupled with the harvesting of high altitude Arabica coffee, which had been delayed by bad weather, this month’s volumes are projected to swell to the tune of 300,000 bags, some 40,000 bags more than realised in December last year.

The projection is based on favourable weather for the drying process and on farmers cashing in on the festive Christmas season.

Increased production in the 2008/2009-crop year will however, not have a significant impact on the global stocks, according to industry experts, because the current yield will be used to reconstitute declining stock as well as to respond to requirements for domestic consumption and exports.

“Coffee producing countries no longer have stock. They sold it all, but this situation will be temporary,” said David Kiwanuka, an official of UCDA.

The US Department of Agriculture estimates that world coffee production in 2008/09 will decline to 138.4 million bags, 2.2 million bags less than previously forecast. Robusta production is estimated at 51.3 million bags and Arabica 87.08 million.

The expected low production is attributed to recent climatic disturbances affecting Central America and Colombia, while the world’s second leading Robusta coffee producer, Vietnam, also suffered bad weather.

Since 1990, there has growing preference for Vietnam’s Robusta coffee, increasing from two per cent then, to 16 per cent in 2008.

Leading coffee producer Brazil, with 40 per cent of the world’s market will experience a reduction in the next crop year given the biennial cycle to which Arabica coffee is subject, creating a negative effect on global stocks.

According to the International Coffee Organisation, opening stock for this year is around 17 million bags compared with 25.4 million bags for the previous crop year.

However, they argue that this figure may be even lower in view of the pressure on stocks needed to meet export requirements, which means that coffee prices will continue to rise in 2009.

“The London International Financial Futures Exchange opened at $1,618 a tonne for January 2009 contracts and closed higher at $1,969 a tonne,” a UCDA report states.