Drop in global coffee prices shrinks farmers’ revenue

Wednesday November 6 2013

By Dorothy Nakaweesi

Global coffee prices have continued on a down-ward trend, casting a gloomy picture on the country’s revenue and farmers’ income.

Latest records from the International Coffee Organisation (ICO) show the drop has continued even as the new coffee calendar begins.

By close of October, ICO composite indicator prices dropped to $100.38 cents down from the $111.82 cents/1b it traded in September.

Experts say this was an 11.3 percentage drop - the lowest level it has ever dropped since 2009.

In an interview with the Daily Monitor, Mr David Barry, the managing director Kyagalanyi Coffee Ltd, Uganda’s leading coffee exporting Company, said: “We may not know what’s ahead of us but trends show a further fall in prices and everyone has to brave for this.”

The drop in price has been attributed to increased production, with the biggest producers being Brazil and Vietnam whose production reached 90 million bags, with the latter posting 60 million bags and the former 30 million.

Crop year 2012/13 has now closed in all exporting countries and according to available information, total production is estimated at 145.2 million bags (all figures for 2012/13 are estimates).

This is 12.8 million bags more than 2011/12, representing a 9.6 per cent increase.

African production
Coffee production in Africa in 2012/13 increased in most countries, going up 16.6 per cent to reach some 18.4 million bags, its highest level since 1999/2000.

“The region’s leading producer is Ethiopia, which increased by 19.1 per cent in 2012/13 to 8.1 million bags. Uganda accounted for 3.2 million bags, up 13.6 per cent on the previous year.

Production in Côte d’Ivoire reached 2 million bags, up 6.1 per cent, and Tanzania more than doubled from 534,000 bags in 2011/12 to 1.1 million in 2012/13,” the ICO report showed.

The ICO report shows the most significant price decline was recorded in Robustas, falling by 4.8 per cent to $83.70 cents/lb, their lowest average since October 2010.