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Why coffee prices continue to drop

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Despite a steady increase in coffee consumption around the world, trade prices have fallen dramatically in the past three years.
Futures on arabica and robusta, the most widespread varieties of coffee, have fallen 40 per cent since 2017 and are now at historically low levels.

This is largely because of bumper harvests in Brazil, the world’s main coffee producer.

But at the same time, consumption has grown by an average of 2.1 per cent a year for the past decade, according to the International Coffee Organisation (ICO).

Two billion cups of coffee are drunk every day, according to Fairtrade International, which works to improve the lot of farmers through better pricing and conditions.

The crisis in prices is beginning to create “real structural problems” for producers, said Valeria Rodriguez, a manager at Fairtrade organisation Max Havelaar France.

“The consequences are terrible – they can no longer support themselves, invest in production or prepare for the challenges of climate change,” she said.

Supplier woes
In central and south America, many smaller producers in Africa and Latin America are giving up in particular those who grow arabica, which is more difficult to produce than the robusta variety favoured in Asia, according to Jack Scoville, a futures markets analyst with Price Group.

A similar trend is observable in Africa for reasons ranging from high production costs in Kenya to insecurity in significant producers like Cameroon.

Few growers have the money to invest, and access to the kind of fertile land they would need to switch to mechanised processes with economies of scale is limited.

As a result, “origins with a higher cost of production such as Colombia, Honduras and Guatemala are forecast to produce less coffee for the 19/20 season”, said Geordie Wilkes, head of research at Sucden Financial.

ICO figures published last week illustrate the trend: South America will see production fall 3.2 per cent in the coming season, compared with 0.9 per cent worldwide.

At the same time, “demand for high quality is very strong”, which protects prices for certain varieties and in certain regions, said Carlos Mera, analyst at Rabobank.

Max Havelaar France guarantees its producers a minimum price of $3.10 per kilogramme of coffee, plus a bonus if the coffee is organic.

Price fixing
But Fairtrade represents only a small section of the market, and the vast majority of producers are vulnerable to prices fixed by traders in London or New York.

However, the low prices they set “do not affect consumer prices”, said Paul Belchi, also from Max Havelaar France.

This is because the supply chain is long, running from the plateaus of South America to trendy coffee shops in the world’s big cities.

When you take into account merchants such as giants Nestle and Lavazza, transportation, real estate prices and staff, the trade price of coffee is only about 10 per cent of what you pay at the counter.

Rarer varieties like Jamaica Blue Mountain, Tarrazu Costa Rica or Bourbon Pointu from Reunion have prices more akin to caviar, negotiated directly between the producer and the merchants.

Some of these varieties change hands at more than $110 per kilogramme, compared with less than $2.20 that arabica fetched Friday November 8 on New York’s ICE Futures US. For consumers, Bourbon Pointu is currently selling online for $54 for 125 grams; $432 per kilogramme to be sure.

Source: Daily Monitor

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FARM NEWS

Govt moves to set up food and agriculture regulatory authority

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Agriculture minister Frank Tumwebaze tabled the Food and Agriculture Regulatory Authority Bill, 2026, for first reading in Parliament on August 25, 2026. (Credit: Maria Wamala)

The Bill has been referred to the Committee on Agriculture for scrutiny. The proposed authority will regulate the manufacture, processing, importation, exportation, distribution, transportation, advertisement, labelling, storage, sale and supply of veterinary medicines, agricultural chemicals, veterinary equipment and devices.

KAMPALA – The Government has proposed the creation of a food and agriculture regulatory authority to bring food, animal medicines, agricultural chemicals and related products under one regulatory framework.

Agriculture minister Frank Tumwebaze tabled the Food and Agriculture Regulatory Authority Bill, 2026, for first reading in Parliament on August 25, 2026.

The Bill has been referred to the Committee on Agriculture for scrutiny. The proposed authority will regulate the manufacture, processing, importation, exportation, distribution, transportation, advertisement, labelling, storage, sale and supply of veterinary medicines, agricultural chemicals, veterinary equipment and devices.

It will regulate food and feed manufacturing, processing and distribution, oversee food and feed safety, develop standards, inspect and certify agricultural inputs, and establish traceability systems for regulated products.

The Bill’s memorandum presents a troubling picture of the current food and agricultural regulatory system, stating that the country is “flooded with counterfeit substandard veterinary medicines and agricultural chemicals.”

It cites concerns over medicines and chemical residues, aflatoxins, harmful microorganisms and heavy metals in food and feed, warning that such contaminants compromise public health and the safety of agricultural exports.

Members of Parliament during Plenary on Tuesday. (Credit: Maria Wamala)The memorandum attributes the problem in part to “fragmented regulation”, which it says has resulted in weak and uncoordinated regulation by multiple agencies, duplication of efforts and inefficiencies in enforcement.

It argues that the absence of a single body overseeing the food and agriculture value chain “undermines the effectiveness of regulation” and creates uncertainty for stakeholders.

The proposed authority will inspect food premises, certify meat for public consumption, inspect and certify fish, regulate processed and semi-processed food, and oversee the storage and transportation of food.

The Bill seeks to regulate food packaging, labelling and advertising, while prohibiting the use of radioactive materials, heavy metals and banned substances in food. It provides for residue monitoring to detect harmful substances in food products.

Members of Parliament during Plenary on Tuesday. (Credit: Maria Wamala)

For agricultural chemicals, the Authority will license manufacturers, distributors, fumigators and commercial applicators. It would regulate the import and export of chemicals, as well as their packaging and labelling, storage, sale and advertising.

The Authority will have powers to recall agricultural chemicals and deal with prohibited, banned, restricted, falsified or adulterated products.

The Bill proposes inspectors and analysts with powers to access establishments, conduct sampling and analysis, seize adulterated products and oversee the disposal of obsolete, banned, prohibited and expired products.

Inspectors will, in certain circumstances, order the detention, return or destruction of non-compliant consignments.

The proposed authority will be a body corporate with perpetual succession. Its functions include the registration of veterinary medicines, veterinary devices, veterinary equipment, agricultural chemical application equipment and agricultural chemicals for use in Uganda.

The authority will be governed by a nine-member board appointed by the minister. The board will comprise a chairperson, six members with expertise in veterinary medicine, agriculture, pharmacy, standards and environmental science, and two representatives of farmers nominated by a recognised farmers’ federation.

The Bill contains 13 parts, 101 clauses and three schedules. It seeks to amend the Dairy Industry Act, Fisheries and Aquaculture Act, National Coffee Act and Animal Feeds Act, while repealing the Agricultural Chemicals (Control) Act and the Food and Drugs Act.

The proposed law seeks to give the Minister power to issue written policy directions to the authority.

The Government argues that the new framework would improve the quality and safety of agricultural inputs, strengthen consumer protection and help Uganda gain access to regional and international agricultural markets.

The Bill moves to the Agriculture Committee, where MPs are expected to examine its regulatory, institutional and enforcement provisions before it returns to the House for further consideration.

The public, including experts, are expected to provide their views on the Bill.

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FARM NEWS

Concern over low cassava yields in Bukedi region

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For decades, cassava has been more than just a crop in Bukedi Sub-region in eastern Uganda. It has served as a lifeline, providing a reliable source of food during droughts, a key source of household income and an integral part of the region’s cultural identity.

Across the districts of Budaka, Kibuku, Butebo, Pallisa and parts of Butaleja, cassava gardens once stretched across vast expanses of land. Families harvested the crop throughout the year, processed it into flour and sold surplus produce in local markets.

Today, however, those fields are shrinking. Farmers are increasingly abandoning cassava cultivation in favour of crops they consider more profitable and less risky, raising concerns about food security and the future of one of Bukedi’s traditional staples.

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FARM NEWS

Parliament gives Jinja land office three months to clear backlog

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Some staff of the Jinja Ministry Zonal Office meet members of the Parliamentary Committee on Land on August 27, 2026. PHOTO/TAUSI NAKATO.

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