Coffee prices, at both the local and international markets, have retreated to levels last seen in 2021 in just two months. Photo / Michael Kakumirizi
A cocktail of issues, including bumper harvests and conflicts in parts of the Middle East, has conspired to plunge the prices of coffee on the international market.
Nearly two million households here in Uganda are staring in blanks – and counting losses.
In the last two months, prices of both Arabica and Robusta coffee on the international market have plunged by nearly 50 percent.
It's real chaos and could worsen because of a projected production surplus of close to 1.5 million in the 2025/26 financial year.
And coffee farmers such as Fredrick Bombo in Butambala District, west of Kampala, are worried.
Tony Mugoya, the Uganda Coffee Farmers managing director, says Brazil, a global coffee-producing leader, is changing the price dynamics on the global stage.
“Brazil will have a bumper crop of about 65 million bags this year, compared to under 60 million last year. So the excess coffee is impacting prices,” he says.
But beyond Brazil, Christine Arwata Alum, a fellow at the Economic Policy Research Centre, says increased production in Colombia and Vietnam after shaking off weather-related challenges, inflamed an already fragile price regime.
Brazil is responsible for roughly 40 percent of global coffee production, supplemented by other leading producers such as Vietnam and Colombia, all of which are experiencing bumper harvests.
But also geopolitical conflicts, such as the Israel-Palestinian war, are adding salt to injury.
“The Red Sea and parts of the Mediterranean are becoming inaccessible or difficult to use. This is where coffee used to be transported through. So now it has to go through Cape Town, causing delays and rising shipping costs,” Mugoya says.
But even with falling prices, Alum says, coffee remains the best bet for increasing incomes, because farmers will see a drop in incomes, but it will be better than those producing other crops.
In the 12 months to March 2025, Uganda exported coffee worth $1.5b. Uganda supplies just 4 percent of the global coffee demand. Thus, unless the country can command volumes at the level of countries such as Brazil and Vietnam, price fluctuations will always be a factor.
For more than 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 turned around in October 2021 throughout 2022.
By January 2022, prices for every kilogramme of exported coffee had risen to $2.57 (Shs9,222), last seen in 2011.
And throughout 2022, Bank of Uganda data shows, 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.
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 high of $4.64 (Shs16,651) in December.
The increase in value continued into 2025, with exporters registering monthly incremental prices, which touched new highs each month, climaxing at $5.15 (Shs18,481) per kilogramme in March and April.
