Coffee futures are settling higher on Tuesday, despite concerns over fresh COVID-19 lockdowns in the US and Europe. The crop has come under tremendous pressure this year due to slumping demand, with more consumers drinking coffee at home instead of at cafes and restaurants. Although prices have recovered to above $1 per pound in recent months, they are still down about 20% in 2020.
March coffee futures tumbled $0.003, or 0.28%, to $1.0695 per pound at 19:07 GMT on Tuesday on the US ICE Futures exchange. Coffee is on track for a 2% loss in October.
The newest industry report comes from the Uganda Coffee Development Authority (UCDA), the state-owned regulator of the industry. One of the world’s top coffee markets warned that global coffee prices may be at the start of an upward trend because of harsh weather conditions in Brazil.
Researchers note that the La Nina climate pattern could threaten Brazil’s next harvest, potentially impacting output next year.
As a result, Uganda is preparing to increase coffee exports by as much as 55 million 60 kg bags of the beans by 2025. The UCDA believes favorable weather conditions and a boost in the supply of seedlings to domestic farmers could allow the country to achieve this lofty goal.
By the end of the fiscal year 2020 in September, Uganda’s coffee export revenues reached close to $500 million. President Yoweri Museveni has attempted to resuscitate the Uganda economy in the aftermath of the coronavirus pandemic by concentrating on its commodities industry.
Throughout most of 2020, coffee chains and restaurants have been forced to shutter stores or curtail operations to abide by government-imposed COVID-19 restrictions. Even when some restrictions were relaxed, consumers did not flock to coffee shops, preferring to consume the hot beverage at home. But this is not enough to sustain the international market. With a resurgence in confirmed cases, second wave fears have prompted calls for fresh lockdowns across North America and Europe.
In other agricultural commodities, December corn futures fell $0.02, or 0.48%, to $4.1575 per pound. December wheat futures shed $0.045, or 0.73%, to $6.155 a bushel. December soybean futures declined $0.07, or 0.65%, to $10.765 per bushel.