Uganda's export earnings increased 10.2 percent year on year in July, driven by stronger shipments of gold, cocoa, flowers and other commodities, according to a Finance Ministry report.

Export receipts rose to $1.40 billion during the month from $1.27 billion in July last year, providing additional foreign currency inflows at a time when the Ugandan shilling has been weakening against the US dollar.

Gold recorded one of the strongest increases, with the value of shipments rising 35 percent to $788.45 million in July.

The Finance Ministry attributed the overall improvement to higher earnings from several commodities, including gold, cocoa, flowers and maize.

GOLD SHIPMENTS REACH $788 MILLION

Gold was a major contributor to Uganda's export performance during July.

The value of gold shipments reached $788.45 million, representing a 35 percent increase from a year earlier.

The increase reflected both higher export volumes and stronger international gold prices.

The Finance Ministry said increased global demand for gold as a safe haven amid heightened geopolitical tensions contributed to higher international prices.

Uganda has developed into an important regional gold processing hub, with the precious metal becoming one of the country's major sources of foreign exchange.

COCOA FLOWERS AND MAIZE ALSO CONTRIBUTE

Growth was not limited to gold.

Higher earnings from cocoa, flowers, maize and other commodities also contributed to the increase in Uganda's overall export receipts.

The performance highlights the continued importance of agricultural and commodity exports to the East African country's external trade.

Gold and coffee remain among Uganda's main sources of foreign exchange, while agricultural products provide additional export revenue and employment.

EXPORT EARNINGS REACH $1.40 BILLION

Uganda earned $1.40 billion from exports in July compared with $1.27 billion during the same month a year earlier.

That represents an increase of approximately $130 million over the twelve month period.

The 10.2 percent annual growth follows continued efforts by Uganda to increase export volumes and expand earnings from minerals and agricultural commodities.

The higher receipts also increase the amount of foreign currency entering the economy through international trade.

HIGHER EARNINGS COULD SUPPORT SHILLING

The increase comes as Uganda's shilling faces pressure against the US dollar.

Stronger export receipts can potentially provide some support to a country's currency because exporters bring additional dollars and other foreign currencies into the domestic financial system.

That can increase foreign exchange availability and help offset demand from importers and businesses requiring dollars.

The effect is not automatic, however.

Currency movements are also influenced by factors including demand for imports, energy costs, debt payments, investment flows and wider global financial conditions.

SHILLING HAS FACED RECENT PRESSURE

Uganda's currency has weakened in recent days amid stronger demand for US dollars.

Manufacturers and companies in the energy sector have contributed to dollar demand, while uncertainty in international markets has added pressure.

The improvement in export receipts could therefore provide an additional source of foreign currency to the market.

Whether that is sufficient to reverse the shilling's weakness will depend on the balance between dollar inflows and demand over the coming weeks.

GOLD REMAINS CRITICAL TO UGANDA

Gold's contribution of $788.45 million means the commodity accounted for more than half of Uganda's total export earnings during July.

The figures underline the growing importance of gold to the country's external sector.

Uganda processes gold from both domestic and regional sources and has developed refining capacity that has helped increase the commodity's role in its export economy.

Higher international prices have also increased the value of shipments.

STRONGER EXPORTS BOOST FOREIGN CURRENCY INFLOWS

For Uganda, sustained export growth could strengthen the country's external financial position by increasing its supply of foreign currency.

This is particularly important for an economy that requires dollars to pay for imported fuel, machinery, industrial materials and consumer products.

The July figures provide a positive signal for export performance, although commodity prices and international demand remain capable of changing quickly.

The strength of future export earnings will therefore depend on both shipment volumes and conditions in international commodity markets.