info.afrindex.com
China-Africa Trade Information Service
info.afrindex.com
China-Africa Trade Information Service
Image from All Africa
Uganda's coffee growers holding onto their stock until global prices climb back up.Global prices have continued declining even in the first few weeks of July.
By close of business on Friday, the price of International Coffee Organisation (ICO) composite indicator was at 107.26 US cents of a dollar much lower than it cost in June.
According to ICO in June 2018, the ICO composite indicator decreased by 2.6 per cent to an average of 110.44 US cents/lb, the lowest monthly average since December 2013.
The report said: "Prices for all coffee groups fell in June 2018, though the largest month-on-month decrease occurred for Brazilian Naturals, which declined by 3.7 per cent to 115.10 US cents/lb."
Low coffee prices, according to industry experts, eat deep into farmers' pockets especially in countries like Uganda where the economic conditions is getting tough.
Mr Emmanuel Iyamulemye, executive director, Uganda Coffee Development Authority (UCDA) in an interview with Prosper Magazine said unfavourable coffee prices have seen our stocks pile.
"Farmers are also still holding stock in anticipation for higher price," Mr Iyamulemye says.
Besides this: "Low prices have not attracted exporters to make contracts."
Losses
Some companies are stuck with big volumes of processed coffee while other companies with contacts are buying coffee at losses to fulfill their contracts."
"Some companies are stuck with big volumes of processed coffee while other companies with contacts are buying coffee at losses to fulfill their contracts," Mr Iyamulemye explains.
Experience
Sharing his experience, Mr Joseph Nkandu, the executive director of the National Union of Coffee Agribusiness and Farm Enterprises (NUCAFE), said: "We signed contracts to supply to some of our buyers. Even when the global prices go down, this obligation must be fulfilled."
