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Monday, October 28, 2024

Uganda's Robusta & Arabica Update

Uganda’s 2023/24 coffee season ended on a positive note with 6.3 million bags exported, the second highest on record, and a 3% increase compared to last year, although there were mixed performances from Robusta and Arabica, as reported by Commercial Supervisor Thomas Pitault. While Robusta exports increased by 8% to 5.5 million bags due to favorable weather conditions, there was a sharp decline in Arabica yields, resulting in a 20% drop in exports to 800,000 bags.

Uganda’s 2023/24 coffee season ended on a positive note with 6.3 million bags exported, the second highest on record, and a 3% increase compared to last year, although there were mixed performances from Robusta and Arabica, as reported by Commercial Supervisor Thomas Pitault. While Robusta exports increased by 8% to 5.5 million bags due to favorable weather conditions, there was a sharp decline in Arabica yields, resulting in a 20% drop in exports to 800,000 bags. 

Robusta Harvest 
The healthy Robusta production during the May-August 2024 harvest was attributed to favorable weather conditions from the last quarter of 2023 through March 2024, which accelerated cherry maturation and ripening by a month compared to the previous year. This resulted in a total production of 5.9 million bags, of which 5.5 million have been exported. Part of the strong exports can also be attributed to the inverted market, high interest rates, and the anticipated enforcement of the EUDR by the end of the year, which prompted companies to accelerate the pace of exports. 

As our team has closely monitored the Robusta coffee regions, our surveys have raised concerns about the upcoming harvest. Based on what we’ve seen, 70% of the Robusta trees are in fair condition, which will likely affect their productivity during the next harvest season. The main issue stems from the previous harvest, which was so abundant that it left little room for new flowers to develop properly. This problem became apparent during the early March flowering phase, traditionally responsible for about 40% of the crop’s potential, but this year it exhibited significant weaknesses. Additionally, with the unpredictable weather of recent years and the likely return of the La Niña climate pattern in November, we expect drier conditions that could further inhibit the growth of healthy beans. As a result, we expect a lower yield and smaller beans compared to last summer's crop. We estimate the 2024/25 crop production will reach around 5.3 million bags (-11%). 
 

Arabica Harvest  

Last year, Uganda produced approximately 1 million bags, but this year's harvest from the Eastern and Western regions fell short, with production estimated at around 850,000 bags—a 15% drop year-over-year. This decline was influenced by several factors, explains Thomas. 

Firstly, the main crop in October 2023 was less fruitful due to an off-cycle, where trees stressed by drought produced fewer cherries. Additionally, aging coffee plants (an ongoing problem within Uganda) have struggled to bounce back after two consecutive seasons of disappointing yields. Finally, the fly crop in April and May 2024 saw a significant reduction in potential production due to premature fruit loss, triggered by the dry conditions in September 2023. 

Looking ahead to the 2024/25 crop, the prospects remain challenging. The Arabica harvest has started in Eastern and Western Uganda and will continue through late November 2024. The initial yields are expected to be below average due to a prolonged off-cycle and recent dry spells, especially in districts north of the equator. This dryness has depleted moisture in lowland trees, increasing the likelihood of producing floaters and reducing the conversion ratio from cherry to green bean. Despite these challenges, our skilled lab team continues to ensure the quality selection of green beans for our Drugar and Bugisu coffees and fresh cherry for our own Fully washed production, ensuring consistent flavor and aroma. 

On a positive note, there are hopeful signs for the second harvest in February 2025. With the trees returning to a regular production cycle, we anticipate a slight recovery in yields, forecasting a harvest of 900,000 bags. While this is still 10% below the crop optimal potential, which we estimate at around 1 million bags, it marks a 6% increase over this year’s output. 
 

Sustainability Efforts in Uganda 

In response to fluctuating crop volumes due to climate change, increased competition, and new regulations like the EUDR, Ugacof is strengthening its direct sourcing network. We're achieving this through additional investments in our field procurement capabilities. 

In recent years, we've established several new coffee washing stations in Arabica-growing areas of Western Uganda. In 2024, we completed construction of our sixth station in a region traditionally known for natural processed Arabica. This expansion is designed to directly connect farmers to more lucrative markets, bypassing the need for farm-level processing. We've also introduced two Sucafina-branded products — Fully washed Engeya and Premium Natural Embogo — which allow us to offer farmers higher premiums for their high-quality coffee. 

Moreover, we've expanded our presence in Robusta regions by operating hulling stations and buying centers. These facilities provide farmers with stable, direct markets and enable us to ensure traceability. By offering quality premiums for high yields, we encourage the adoption of better agricultural practices and harvesting methods, helping to combat the effects of climate change. 

Our commitment to improving farmers' livelihoods extends through our IMPACT program, which has registered over 12,500 farmers in various Arabica and Robusta districts. This program enhances our Rainforest Alliance certified supply chain by focusing on coffee quality, increasing farmers' incomes, and fostering community development.  

Additionally, our recent partnership with a regional tech startup to polygon-map and assess thousands of farmers strengthens our efforts towards EUDR compliance. This initiative not only supports environmental conservation but also helps farmers secure their market access, particularly as over 60% of Uganda’s coffee exports are destined for Europe. Furthermore, our collaboration with other exporters in a national consortium underlines our pre-competitive efforts and collective dedication to ensuring the Ugandan coffee sector meets EUDR standards comprehensively. 

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