Coffee prices have experienced a volatile drop in the last four weeks due to oversupply at the global market and subdued demand. Photo / Edgar R Batte
For over 10 years – from 2012 to 2021 – the price of a kilogramme of exported coffee had stagnated at just $1.84 (Shs6,628), having reduced from $2.48 (Shs8,899) in 2011.
However, fortunes started turning around at the end of 2021 in October through 2022, reviving the prospects of one of Uganda’s most valuable commodity exports.
By January 2022, prices for every kilogramme exported had risen to $2.57 (Shs9,222), an increase that had last been seen in 2011.
Thus, the increase signalled the possibility of further fortunes and the return of a commodity that had not lived up to expected earnings for some good years.
Indeed, throughout 2022, according to data from Bank of Uganda, coffee export prices experienced a sustained increase, returning an annual average of $2.55 (Shs9,151), which would increase further in 2023 to $2.63 (Shs9,438).
In essence, by 2023, exported coffee prices had increased by 69.9 percent, with the largest margins registered in just two years, between 2022 and 2023.
But a further increase would be registered in 2024, with the price surging by 65.75 percent to an annual average of $4 (Shs14,354), within which year, prices rose again to a historical high of $4.64 (Shs16,651) in December.
The increase in value continued into 2025, with exporters registering monthly incremental prices, which touched new historical highs each month, climaxing at $5.15 (Shs18,481) per kilogramme in March and April, according to Bank of Uganda data.
Bank of Uganda data also indicates that in the last 12 years, coffee export volumes, as a unit, have been rising, increasing by 42.2 percent from 2.69 million 60-kilogramme bags in 2012 to 6.36 million, 60-kilogramme bags in 2024. Equally, foreign exchange earnings have substantially increased by more than 400 percent from just $372.5m in 2012 to $1,54b.
The events in the last two months are, however, worrying, with both farm-gate and export prices rapidly retreating to levels that had last been seen in October 2021, almost more than three years ago, when a kilogramme of exported coffee fetched $2.1(Shs7,536).
Coffee prices, according to the Ministry of Agriculture, have been under pressure over the past weeks due to concerns about higher production and ample supplies on the global market, worsened by weak demand.
The dynamics have aggressively impacted export prices in Uganda, with data now indicating that a kilogramme of exported coffee is now fetching just $2.7 (Shs9,689).
David Muwonge, the National Union of Coffee Agribusiness and Farm Enterprises (Nucafe) chief commercial officer, says it is a crisis.
Nucafe, a member organisation that manages and coordinates a membership of 237 coffee farmers' cooperatives representing more than 250,000 farmers, is one of the biggest exporters of Uganda’s coffee, but Muwonge says their export output has been declining in the last four weeks.
“We have been getting calls from our members consulting about the price, but the further the price drops, many are hesitant to supply," he says: “This has seen our export output drop by 20 percent."
Nucafe exports directly to buyers in Europe, including Italy, Belgium, the Netherlands, and Spain, as well as to Asia, mainly China and South Korea.
However, the global price fluctuations have made it challenging for the union to maintain a stable price regime for its members.
The decline in prices, which started four to five weeks ago, is projected to continue as the pressure from Brazil's big crop harvest trickles into the global market. Brazil, the largest coffee-producing country in the world, is expected to have a significant impact on the global coffee market.
Numbers
Uganda is the leading coffee exporter in Africa, with data showing that the country exported 6.36 million 60-kilogramme bags in 2024, which generated $1.54b (Shs5.55 trillion) in revenue.
While Uganda is the leading exporter in Africa, Ethiopia remains the largest producer on the continent.
Ministry of Agriculture, which now hosts a coffee department formerly managed by the disbanded Uganda Coffee Development Authority, indicates that during May, the largest share of Uganda’s coffee was exported to Italy, which took 39.23 percent of the exported volumes.
Germany followed, with a distant 9.38 percent market share, while Sudan and Algeria held a 7.15 percent and 6.29 percent share, respectively.
At least 82.65 percent of Uganda’s coffee is exported to just 10 countries.
Within Africa, Uganda exported just 144,042, 60-kilogramme bags - a market share of 18 percent – to Sudan, Algeria, Morocco, Egypt, South Africa, Tunisia, and Kenya, which was, however, an increase from 76,467 bags (11 percent) in April.
In terms of export dynamics, in May Ugacof, with a market share of 13 percent, exported the largest share, followed by Touton (7.12 percent), Export Trading Company (6.96 percent), Olam (6.69 percent), and Jber Coffee (5.98 percent).
Other exporters included Ideal Quality Commodities with a share of 5.89 percent, Kyagalanyi Coffee (5.53 percent), JKCC General Supplies (5.40 percent), Louis Dreyfus (4.69 percent) and Besmark Coffee Company (3.81 percent), among others.
What is the plan?
Nucafe fears that the price fall might continue in the foreseeable future.
Therefore, Muwonge says, once prices drop further, “our haven will be to negotiate better contracts with our buyers”.
By securing predictable prices, he says, members will be protected from a volatile price regime that has no end in sight.
Beyond this, Muwonge says, Nucafe could focus on certified coffees under fair trade and premium market, which they believe “will enable us to increase the volumes we export under this arrangement”.
Mr Gerald Katabazi, the Volcano Coffee chief executive officer, says specialty coffees have the potential to at least shield exporters from price fluctuations, which are sometimes beyond market control.
