Coffee prices likely to increase in the 2018/19 harvest season
Green coffee is considered to be an agricultural commodity,so can be traded on commodity markets.Arabica coffee is traded on the New York international commodity Exchange (NY ICE),whereas its counterpart Robusta coffee on LIFFE London international financial futures Exchange
Commodity price indices are used as a starting point for negotiations when buying coffee ,falling prices of commodity markets and low prices for high quality African specialty coffee will greatly affects small coffee producers mostly in African coffee growing regions where the coffee production cost are high coupled with poverty ,dysfunctional government systems and co-operative societies,poor book keeping records,poor infrastructure and limited access to financial services.
Therefore small holder farmers need more commitment and support from coffee exporters ,producers and notably roasters to recognize and reward more to small holders farmers at origin .
According to Ejournal ,Exploring African Great lakes coffee in East African countries,labour cost represent more than 70% of the total production and a further 30% on disease and control.
For example in Burundi the average cost of production for a farmer who adopts good agricultural practices varies between 50.1 us cents to 57.6 us cents per tree where an average size of a farm is 100 trees,therefore coffee sustainability is still a challenge due to high costs production for certified coffee and specialty coffee involved in the perspective of an African coffee farmer.
Uganda is ranked the 4th producer of Robusta coffee in the world and is currently producing 4.8 million bags ,The 2025 roadmap of 20 million bags has enchanted the increase in both quality and quantity and there is hope that this will attract future markets to continue to pay higher premiums for high quality coffee.
The ugandan coffee provides and encourages more coffee stock brokers with attractive discounts on high quality specialty Arabica coffee and specialty Robusta to attract more Coffee exports and production coffee investments in uganda .The ugandan government has created an attractive and conducive investment hubs and parks ready for future coffee investment and value addition to ugandan coffee.
Most certified stocks are usually mostly made up of Robusta coffee from Vietnam the world ‘s top grower of the variety.meanwhile the strong physical differentials continue to make Vietnamese beans more expensive for the industry,further boosting the appeal of the cheaper certified Robusta.
Coffee prices are likely to increase in the 2018/2019 harvest season compared to the 2017 ico coffee prices clearly justified the above narrative by highlighting the difference in prices of coffee from the major coffee growing regions in the previous 2017 harvest.
Current Green coffee production
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Coffee price crisis and the effects of falling coffee prices are real
“The wealth which enslaves the owner isn’t wealth ” An African proverb