UCDA MONTHLY REPORT FOR JANUARY 2016 Highlights: This is the fourth monthly report for the coffee year 2015/16. A total of 334,393 60-kilo bags of coffee valued at US $32.10 million were exported in January 2016 at an average weighted price of US $1.60/kilo, 3 cents lower than US$ 1.63/kilo last month. Cumulatively coffee exports from October-January increased by 10% and 40% for Robusta and Arabica respectively compared to the same period last year. However, the value of coffee exports decreased by 10% for Robusta and 16% for Arabica Farm-gate prices for Robusta Kiboko averaged Shs. 2,100/= per kilo; FAQ Shs.4,000 per kilo, Arabica parchment Shs 5,000 per kilo and Drugar Sh. 4,250/kilo. Coffee exports for 12 months (February 2015 to January 2016) totalled 3.62million bags worth $395 million. This represented 8% increase in volume of exports compared to the same period last year. In the month of January no seedlings were planted since it is an off-season. This month, emphasis was on provision of coffee seed to nursery operators for the second rains planting where 19 MT of Robusta and Arabica seed were distributed to nursery operators bringing total seed distributed to-date to 49 MT Tissue culture seedlings generation for 500,000 seedlings is progressing at FICA Laboratory in Kyenjojo District, and the entire lot is due for weaning and hardening from February 2016 Slightly over 79% of the total export volume was exported by 10 exporters, out of 31 who performed during the month. 1.0 COFFEE EXPORTS Coffee exports in January 2016 amounted to 334,393 60-kilo bags valued at US $ 32.10 million composed of 256,996 bags ($ 22.87 million) of Robusta and 77,397 bags ($ 9.23million) of Arabica (see Table 1). Table1: Comparative Coffee Export Performance – 60-kilo bags; US$ Coffee Year Grand Total 2015/16 Qty 2014/15 %-age Change Value $ Qty Value $ 1,148,941 113,602,727 984,342 129,594,455 16.72 Qty Value $ -12.34 Robusta 825,846 76,242,278 753,026 85,041,588 9.67 -10.35 Arabica 323,095 37,360,450 231,316 44,552,868 39.68 -16.14 334,393 32,101,652 7.82 -19.12 5.17 -15.40 17.66 -27.06 52.32 12.89 48.95 17.71 64.72 2.04 January Robusta 256,996 22,869,589 Arabica 77,397 9,232,063 342,429 33,584,753 310,149 244,366 65,783 224,803 Robusta 263,214 24,234,767 176,711 Arabica 79,215 9,349,986 48,092 39,691,234 27,033,929 12,657,306 29,750,803 20,587,890 9,162,913 248,921 25,048,473 219,948 29,494,827 13.17 -15.23 14,836,751 159,447 17,998,556 -1.31 -17.71 December November Robusta 157,358 Arabica 91,563 10,211,723 60,501 11,496,271 51.34 -11.35 223,198 22,867,849 229,442 30,657,591 -2.43 -25.20 October Robusta 148,278 14,301,171 172,502 19,421,213 -13.66 -26.03 Arabica 74,920 8,566,678 56,940 11,236,378 31.58 -23.76 1 UCDA Monthly Report, January 2016 Cumulatively coffee exports from October-January increased by 10% and 40% for Robusta and Arabica respectively compared to the same period last year. However, the value of coffee exports decreased by 10% for Robusta and 16% for Arabica. Just like the previous month, both Robusta and Arabica coffee exports increased by 5.17% and 17.66% compared to the same month the previous year. On the contrary, in terms of value both types reduced by 15.4% and 27.06% respectively compared to the same month the previous year. On a year-on-year basis, coffee exports for 12 months (February 2015 to January 2016) totalled 3.62 million bags worth $395 million comprising Robusta 2.80 million bags and Arabica 0.82 million bags. Compared to the same period last year, the volume of coffee exports increased by 8% while the value decreased by 4%. Charts 1 and 2 give the cumulative coffee export performance by coffee type in both quantity and value in 2 coffee years during the first four months of this year 2015/16. Chart 1 shows an increase in both Robusta and Arabica exports over last year. Chart 2 reflects a reduction in value for the 2 coffee types in CY 2015/16 compared to the previous year 2 UCDA Monthly Report, January 2016 1.1 EXPORTS BY TYPE AND GRADE Table 2 shows coffee exports by type, grade and average realised price for each coffee grade during the month of January 2016.The weighted average export price was US$ 1.60 per kilo, 3 cents lower than US $ 1.63 realized in December 2015. Robusta exports accounted for 76.9% of total exports compared 77% the previous month. The weighted average Robusta price was US$ 1.48 per kilo, US cents 5 lower than in December 2015. Organic Robusta fetched the highest price for Robusta at US$ 1.90 per kilo 2 cents lower than last month, followed by Washed Robusta which fetched US$ 1.79 per kilo. These presented a premium of 28 and 17 cents respectively over conventional Screen 18 sold at an average of US$ 1.62 per kilo. Arabica fetched weighted average price of US$ 1.99 per kilo, US Cents 2 higher than in December 2015. The highest price was for Sipi Falls sold at US $ 4.14 per kilo, 166 cents higher than conventional Bugisu AA. This was followed by Washed Arabica sold at US$ 3.56 per kilo, 108 cents above Bugisu AA and then followed by Mt. Elgon A+ sold at US $ 2.57 per kilo, 9 cents above conventional Bugisu AA. A 47 cents premium between Organic Drugar and conventional Drugar was observed. Drugar was at US $ 1.66 per kilo. Table 2: Coffee Exports by Type, Grade & Unit Price in January 2016 in 60kilobags; US $, US $/kg Coffee type/ Grade TOTAL ROBUSTA WASHED ROBUSTA ORGANIC ROBUSTA SCREEN 18 SCREEN 17 SCREEN 15 SCREEN 14 SCREEN 12 BHP 1199 OTHER ROBUSTA 3 Quantity 60-Kilo Bags 334,393 256,996 640 710 27,838 21,114 137,578 654 47,072 9,844 11,546 %-age Quantity 0.25 0.28 10.83 8.22 53.53 0.25 18.32 3.83 4.49 Value in US $ 32,101,652 22,869,589 68,572 81,125 2,703,124 1,960,341 12,611,077 56,231 3,959,925 634,784 794,410 %-age Value 100.00 0.30 0.35 11.82 8.57 55.14 0.25 17.32 2.78 3.47 Unit Price $/Kilo 1.60 1.48 1.79 1.90 1.62 1.55 1.53 1.43 1.40 1.07 1.15 UCDA Monthly Report, January 2016 ARABICA SIPI FALLS MT. ELGON A+ MT ELGON A ORGANIC BUGISU WASHED ARABICA ORGANIC OKORO ORGANIC DRUGAR BUGISU A+ BUGISU AA BUGISU PB BUGISU AB WUGAR DRUGAR OTHER ARABICA 77,397 320 4,900 670 3,620 1,280 1,800 3,100 1,800 9,886 1,240 3,360 5,600 35,331 4,480 0.41 6.33 0.87 4.68 1.65 2.33 4.02 2.33 12.73 1.60 4.34 7.24 45.65 5.79 9,232,063 79,577 754,809 93,255 534,660 273,356 247,621 394,037 259,526 1,473,493 171,573 409,003 759,522 3,513,545 268,086 100.00 0.86 8.18 1.01 5.79 2.96 2.68 4.27 2.81 15.96 1.86 4.43 8.23 38.06 2.90 1.99 4.14 2.57 2.32 2.46 3.56 2.29 2.11 2.40 2.48 2.31 2.03 2.26 1.66 1.00 1.2 INDIVIDUAL EXPORTER PERFORMANCE Table 3 illustrates the performance of the individual coffee exporting companies in the month of January 2016 in terms of quantity and market share. Ugacof (U) Ltd maintained its lead with a market share of 17.15% compared to 14.41% the previous month, followed by Kyagalanyi Coffee Ltd-15.59% (11.65%); Ideal Commodities10.02% (11.31%); Olam (U) Ltd- 8.17% (9.11%);Kawacom (U) Ltd-5.70%(4.28%); Ibero (U) Ltd- 5.13% (7.92%); followed by Commodity Solutions-4.56% (1.72%); and Kampala Domestic Store-4.39%(7.51%).The first 10 exporters held a market share of 79.2% higher than 71.31% the previous month reflecting increasing concentration at this level compared to the previous month. Changes in relative positions of exporters indicate competition among the actors. The figures in brackets represent percentage market share held in December 2015. 4 UCDA Monthly Report, January 2016 Table 3: Export Performance by Individual Companies in January 2016 EXPORTING COMPANY 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 GRAND TOTAL Ugacof (U) Ltd Kyagalanyi Coffee Ltd Ideal Commodities (U) Ltd Olam (U) Ltd Kawacom (U) Ltd Ibero (U) Ltd Commodity Solutions Kampala Domestic Store Export Trading Company Ltd Ishaka Commodities Ltd Besmark Coffee Ltd Savannah Commodities Great Lakes Coffee Ltd Coffee World Risala (U) Ltd Ankole Coffee Processors Nakana Coffee Factory Sena Indo (U) Ltd LD Commodities Kibinge Coffee Market Ltd Bakhsons Trading Co. Ltd Ankole Coffee Producers Bakwanye Trading Co. Ltd Karaz Coffee Factory Banyankole Kweterana Coop Gumutindo Coffee Cooperative Bulamu Coffee Buyers Ltd Kaweri Coffee Plantation Mbale Importers and Exporters Ltd Bukonzo Joint Coop Union NUCAFE Ltd POSITION HELD IN DECEMBER 1 2 3 4 8 5 14 6 7 9 13 10 11 12 22 17 15 19 16 25 23 18 21 31 32 24 30 27 QUANTITY (Bags) 334, 393 57,357 52,116 33,500 27,307 19,060 17,170 15,242 14,674 14,302 14,030 13,498 10,364 9,720 6,006 4,400 4,240 3,824 2,325 2,322 2,240 2,100 1,962 1,294 1,050 1,034 960 660 640 356 320 320 PERCENTAGE MARKET SHARE Individual Cumulative 100.00 17.15 17.15 15.59 32.74 10.02 42.76 8.17 50.92 5.70 56.62 5.13 61.76 4.56 66.31 4.39 70.70 4.28 74.98 4.20 79.18 4.04 83.21 3.10 86.31 2.91 89.22 1.80 91.01 1.32 92.33 1.27 93.60 1.14 94.74 0.70 95.44 0.69 96.13 0.67 96.80 0.63 97.43 0.59 98.02 0.39 98.40 0.31 98.72 0.31 99.03 0.29 99.31 0.20 99.51 0.19 99.70 0.11 99.81 0.10 99.90 0.10 100.00 2.0 LOCAL SITUATION During the month, farm gate prices ranged from Sh. 1,800-2,300 per kilo of Kiboko (Robusta dry cherries); Shs. 3,800-4,400/= for FAQ; Sh. 5,700-6,200/= for Arabica parchment; and Sh. 4,500-4,800/= per kilo for Drugar from Kasese. The averages were: Sh. 2,000 per kilo for Kiboko coffee; Sh. 4,100 for Robusta FAQ; Sh. 5,250 for Arabica parchment and Sh. 4,650/= for Drugar. 3.0 GLOBAL SITUATION Global coffee exports for December 2015 amounted to 9.3 million bags, a 1.3% increase from the same month the previous year. The global quarterly exports are 26.9 million bags, 2.6% higher than the same quarter last year. 5 UCDA Monthly Report, January 2016 The world total production for coffee year 2014/15 was estimated at 143.25 million bags down 2.3% compared to the previous year. Robusta production was estimated at 58.25 million bags, 2.3% lower than the previous year. Global consumption for 2014 was revised upwards again to 150.28 million bags on account of increased domestic consumption in Asia. The ICO monthly average composite indicator price was US 111.89 cents/lb down from US cents 144.63 in December 2015. 4.0 COFFEE EXPORTS BY DESTINATION Table 4 shows coffee exports by destination during the month of January 2016. Exports to EU countries amounted to 231,334 bags higher than 21,216 bags the previous month accounting for 69.18% of total exports higher than 67.57% last month. This was followed by Sudan with 61,444 bags (18.37%) compared to 83,014 bags (24%) exported last month; USA with 11,244 bags (3.36%) compared to 10,210 bags (2.98%) exported last month and South Korea 7,709 bags (2.31%) compared to 6,377 bags(1.86%). Coffee exports to Africa amounted to 68,196 bags, a market share of 20% valued at US $ 6.14 million. The figures in brackets represent market share. Table 4: Main Destinations of Uganda Coffee in January 2016. DESTINATION POSITION HELD IN DECEMBER QUANTITY (60KG BAGS) %AGE MARKET SHARE Individual Grand Total Cumulative 334,393 100 1 EU 1 231,334 69.18 69.18 2 Sudan 2 61,444 18.37 87.56 3 USA 3 11,244 3.36 90.92 4 South Korea 6 7,709 2.31 93.22 5 Morocco 5 3,872 1.16 94.38 3,490 1.04 95.42 10 2,560 0.77 96.19 8 Mexico 9 1,920 0.57 96.76 9 Russia 7 1,920 0.57 97.34 10 India 4 1,900 0.57 97.91 11 Switzerland 8 1,820 0.54 98.45 5,180 1.55 100 6 New Zealand 7 South Africa - 12 Others 5.0 BUYERS OF UGANDA COFFEE The buyers of Uganda coffee in January 2016 are shown in table 5. The top 10 buyers held a market share of 62.25% of total exports lower than 64.57% in December, 2015. Just like the previous month, Sucafina led with a market share of 16.29% compared to 13.25% the previous month followed by Altasheel –7.94% (5.76%); Olam International -6.12% (4.73%); Ecom Agro Industrial- 5.6% (4.10%). The changes in relative positions of the buyers compared to the previous month reflect 6 UCDA Monthly Report, January 2016 competition for Uganda coffee among different buyers. Note: The figures in brackets represent percentage performance in the previous month – December 2015. TABLE 5: Buyers of Uganda Coffee in January 2016 BUYERS Position held in December GRAND TOTAL QTY 60-Kilo Bags %-Age Market Share Individual 334,393 100.00 Cumulative 1 Sucafina 1 54,477 16.29 16.29 2 Altasheel 3 25,200 7.54 23.83 3 4 5 6 7 8 Olam International Ecom Agro Industrial Strauss Commodities Bernhard Rothfos Cofftea ETG Commodities 6 8 12 2 9 - 20,466 18,740 18,483 17,170 14,000 13,942 6.12 5.60 5.53 5.13 4.19 4.17 29.95 35.55 41.08 46.21 50.40 54.57 9 Socadec 7 13,285 3.97 58.54 10 11 Coex Coffee Abaco International 19 4 12,402 11,900 3.71 3.56 62.25 65.81 12 13 Icona Café Bercher Consulting 10 21 11,714 10,712 3.50 3.20 69.31 72.52 14 15 Volcafe Elmathahib 11 13 9,600 8,750 2.87 2.62 75.39 78.00 16 17 Aldwami Namyang D 5 15 7,700 6,809 2.30 2.04 80.31 82.34 18 19 Hamburg Coffee Falcon Coffee 14 17 6,062 5,440 1.81 1.63 84.16 85.78 20 21 . 22. 23 Luigi Lavazza Abu - Asma 18 26 4,800 4,400 1.44 1.32 87.22 88.53 Gollucke Supremo 23 - 3,150 3,100 0.94 0.93 89.48 90.40 24 25 32 Cup Tropicore 28 2,600 2,014 0.78 0.60 91.18 91.78 26 27 Louis Dreyfus Outspan 16 22 1,990 1,920 0.60 0.57 92.38 92.95 28 Intergran - 1,690 0.51 93.46 21,877 6.54 100.00 Others 7 UCDA Monthly Report, January 2016 6.0 COFFEE DEVELOPMENT AND PROMOTIONAL ACTIVITIES 6.1 COFFEE PRODUCTION ACTIVITIES 6.1.1 The Weather Situation Central Region The weather was generally hot and dry during the first two weeks of the month. However, during the last two weeks of the month, several down pours were received. This enabled the plants/trees that had suffered from water stress previously to recover. The rains also triggered off flowering of the coffee trees in most parts of the Region. Farmers were advised to construct water harvesting trenches so that the coffee trees could maximally benefit from these short unpredictable rains. Western Region Kyenjojo and Rwenzori sub regions experienced a dry spell with some coffee showing signs of drying in certain parts that are close to the cattle corridor especially in Kyegegwa. In Kabarole and the highland of Kasese the mountainous areas are still receiving some moderate rains except the low lands that are dry. Mityana and Hoima sub regions are generally dry with Hoima being the most affected and the district may experience some seedlings mortality. Northern Region The month was marked with dry and hot weather in Mid North. However, during the second to third week some heavy rains were encountered across the districts of Nebbi and Zombo , only 3 rain days but with high intensity and fairly evenly distributed except for some heavy storms and hailstones reported around Warr sub county that destroyed one nursery. The rains triggered massive flowering of coffee in West Nile region. Eastern Region 8 The month was characterized by cloudy weather conditions and light rains evenly distributed throughout a majority of the districts in the region. Postharvest handling operations were not greatly affected due to the receding levels of coffee marketing as the harvest season is winding-up. Most parts of Busoga received good rains throughout the month which has initiated flowering and have helped the establishment of the recently planted coffee. The un -expected rains received in this month could be a result of weather variations, but on a good note have resulted in heavy flowering of coffee in most coffee gardens and more so in those farms where management is good, and pin-head formation ,development which will result in better fly crop. UCDA Monthly Report, January 2016 South Western Region The weather was generally dry across the region with occasional unevenly distributed showers that has helped newly planted trees establish well. 6.1. 2: Generation of Coffee Planting Material No coffee Wilt Disease Resistant seedlings distribution done during the month. Tissue culture seedlings generation for 500,000 seedlings progressing at FICA Laboratory in Kyenjojo District, and due for weaning and hardening from February 2016. Elite seedling Nurseries – 19 MT of Robust and Arabica seed distributed to Nursery operators bringing total seed distributed to-date to 49 MT. 6.1.3 Management of Diseases and Pest out Breaks. Coffee mealy bugs have continued to spread especially in Arabica areas. Control measures have been put in place through farmer training and sensitization. Prevalence of Black Coffee Twig Borer has escalated in most regions. Chemicals and Equipment for demonstration and part containment was dispatched to all the regions and spraying commenced, addition to cultural methods and proper phytosanitary practices. Local Agro-input stockists have started to sale other chemicals in different brand names but having imidacloropid which has been seen to be effective in managing the pest as well as other pests in the coffee farms. 6.2 COFFEE PROMOTION ACTIVITIES 6.2.1 Continuous Quality Improvement Carried out an M&E exercise in Bushenyi, Masaka and Iganga. Farmers and processors are not fully engaged as it is off season. A few farmers were drying kiboko. Suspended operations of 1 factory for drying coffee on the ground. Coffee had started flowering across the Robusta growing areas. Supported cupping of 9 samples from Buginyanya and Busano from Mt Elgon region. All samples passed for specialty classification as they all scored above 80 points. 6.2.2 Capacity building of industry players through training and skills development Trained and prepared the National Barista champion for the 6th Africa Barista Challenge. The champion, Mr. Dennis Agaba used coffee from Mt. Elgon area at the Africa Barista Challenge during the 14TH AFCA in Dar es salaam, Tanzania. 6.2.3 Generic promotion • Promoted coffee consumption at Parliament with the Ambassadors and high 9 commissioners. UCDA provided coffee for tasting Promoted Coffee at UCU bazaar by providing information on coffee health benefits, coffee for tasting and also engaged the coffee club in the promotion of coffee drinking. UCDA Monthly Report, January 2016 Held a meeting with the Speke Hotel Group on a collaboration to improve the quality of the coffee served. UCDA will provide technical support and train their staff. UCDA hosted the Taste of Harvest competition. This event was organized by AFCA and held at Lugogo UCDA Laboratory. 10 samples were selected to be cupped at African Fine Coffees Conference & Exhibition in Dar es Salaam, Tanzania. The scores were: o Arabica: Kawacom Natural Sipi Cheema 84.75; Kawacom Natural Sipi 83.65; Kyagalanyi Bugisu A 83.2; Chanzo Wugar SC 15+ 83.2; Kawacom Fully Washed Sipi Kaseremu 82.3 o o Robusta: Celebrate Hope Ministries Sc17/18 81.75; Kyinabo FAQ 81.7; Manya TC- SC15+ 81.55; Manya TCsc15+ 81, Kigobero FAQ 80. The scores reflect Uganda’s competitiveness in Specialty markets for both Robusta and Arabica and enhanced private investment in value addition. 6.2.4 Centre for Robusta Excellence (CORE) Carried out a monitoring exercise of the project with aBi trust staff. Visited 12 farms (demos 10 & 2 farmers) stumping, soil and water conservation main demonstration and adoption by farmers increasing mainly in the South Western Uganda. 5 out of 10 demos plots visited were performing as expected while others are still being developed. Rate of adoption was greater in the Western region as compared to both Eastern and Central regions with demo farmers in Bushenyi and Greater Masaka demonstrating GAPs (stumping, weeds management). 20 samples were collected from CORE specialty farmers in Central, Eastern and Western regions for analysis and 6 samples (2 washed and 4 natural) were presented for National Taste of Harvest (ToH) competition. 7.0 OUTLOOK FOR FEBRUARY 2016 February exports are projected at 300,000 bags as harvesting of the main season in Central Region and Eastern region is almost over as well as the fly crop in Masaka and South-Western regions. 8.0 UPCOMING EVENTS 1. 2nd to 4th February, African fine Coffee Conference and Exhibition, Dar es Salaam, Tanzania 2. Elementary Basic Quality training: 23rd to 26th February 2016, Eastern region: Bulambuli, Kamuli, Namutumba, Mayuge, Central region: Mityana and Mubende. This training is aimed at increasing the capacity of field based quality controllers to analyze coffee. 3. 4th World Coffee Conference 6th to 8th March 2016 at the United Nations Conference Centre, Menelik II Ave., Addis Ababa, Ethiopia. 4. 17th to 19th March Melbourne International Coffee Expo - Melbourne, Australia 10 UCDA Monthly Report, January 2016
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