MILAN – Technical, financial and market fundamentals contributed to a partial decline in coffee futures prices in the last few sessions of the year. The Ice Arabica saw four consecutive sessions in the red with the main contract (March) ending the year at 319.75 cents per lb, still a 69.8% increase over the close of the last trading day of 2023 (29 December 2023), which was of 188.30 cents.
The Ice Robusta wrapped up 2024 with three consecutive sessions in negative territory to settle on 31 December at $4,875: 71.6% higher than the last session of 2023.
During the past year, both coffee futures markets experienced unprecedented rises, reaching new all-time highs.
New York soared on 10 December 2024 to an intraday high of 348.35 cents, the highest level in nominal terms for Arabica futures since 1972.
London closed on 26 September 2024 at 5,527 (intraday of $5575), an all-time high for the 10-T contract.
The partial easing recorded by the markets in the last few sessions of the year can be attributed to a number of contributing factors, including: a stronger dollar, a partial increase in certified stocks, particularly in New York, and moderate optimism about recent weather patterns in the Brazilian coffee belt, where heavy rains fell last week.
However, the situation remains tense and both markets opened today sharply higher.
The latest statistics show that Uganda exported 897,356 bags of coffee in the first two months of 2024/25, a figure more or less in line with last year (-0.2%). The value of exports increased by almost 54% to a total of $108.91 million, due to the sharp rise in prices.
Uganda’s production is expected to reach 6.5 million bags in 2024/25 (of which 5.5 million are robust), roughly matching last year’s levels.
In a public address marking the start of the year, the Ugandan President Yoweri Kaguta Museveni expressed his satisfaction with the results achieved in the coffee sector, reports local media.
The key to this success – according to Museveni – the so-called ‘4-acre model’ (4 acres = 1.6 hectares), which promotes intensive farming practices to maximise the yield of smallholder farmers.
This model is based on the indicative division of a small plot of land into 1 acre of clonal coffee, 1 acre of fruit crops, 1 hectare of pasture for dairy cattle and 1 hectare of food crops.
All of this combined with backyard poultry and piggery and fish farming, where possible. While other crops – such as tea or sugarcane – require larger acreages to be profitable, this model works very well for coffee, ensuring an economically viable management for smallholders.
