MILAN – Coffee futures prices rose sharply for the third consecutive day. December ICE Arabica coffee futures closed 1,075 points up at 239 cents per lb, the highest level for the most-active contract since early June. The benchmark has surged by 25.65 cents since the beginning of the week, or a 12% increase in three days.
November ICE Robusta coffee futures in London closed up $90 at $2,348. This is the highest price for the benchmark since the beginning of the year.
According to Reuters, the market continued to derive support from dry weather in Brazil coffee areas, which has raised the prospect there could be insufficient moisture to sustain the development of coffee buds and cherries after heavy rains earlier this month led to some early flowering.
New York certified stocks rose slightly on Wednesday reaching a total 663.780 bags, up from a 23-year low of 571,580 bags on August 15th.
Climate Models show that La Nina weather conditions are likely to last through the end of the year. This could lead to below-normal rain for Brazil in the coming months exacerbating drought conditions and further stressing coffee crops.
The Chinese market has the potential to absorb all Ugandan coffee at a premium price, and inroads have been made to curve out a niche in this market through online marketing. Dr Lyamulemye Niyibigira, the managing director, Uganda Coffee Development Authority (UCDA) said the Chinese market, which boasts of 1.4 billion consumers, has the potential to revolutionise Uganda’s coffee sub-sector.
“We are focusing on this potential to tap into the global supply chain and ensure increased popularity of the Ugandan coffee,” Niyibigira said in an interview with NewVision, adding that after this year’s Dubai Expo in which Uganda participated in a big way, the popularity of Uganda’s coffee on the global market has continued to grow.
Meanwhile, the Ugandan Coffee Development Authority UCDA have reported that their country’s coffee exports for the month of July were 122,907 bags or 17.57% lower than the same month last year, at a total of 576,468 bags.
Uganda Robusta exports registered a 19.91% decrease when compared to the same month last year, to total 528,235 bags and Arabica exports registered a comparative increase by 21.24% to a total 48,233 bags exported in July this year.
The UCDA also reports that the cumulative exports for the first ten months of the current October 2021 to September 2022 coffee year to be 360,233 bags or 6.92% lower than the same period in the previous year, at a total of 4,847,892 bags.