The price of coffee this week dropped 10 per cent on account of low quality beans as the current crop season comes to a close.
At the auction, the 50-kilogramme bag traded at Sh16,065 on average down from Sh17,955 fetched last week at the Nairobi Coffee Exchange (NCE).
This is the sharpest decline at the Wakulima House-based NCE since the auctions resumed in July after a one-month recess.
NCE chief executive Daniel Mbithi said the auction is currently receiving low-quality beans, which has driven down demand of the clean coffee as well as the prices. “This is a traditional trend where the prices of coffee come down at this time of the year as we head towards the end of the season’s crop,” said Mr Mbithi.
The auction has been receiving coffee from the eastern part of the country since July, with the main harvesting season for the major crop expected to start in November.
Mr Mbithi, however, has expressed concern that they might not be able receive the main crop in time because of the anticipated heavy El Niño rains likely to hamper drying of beans. The weatherman predicts that the rainfall will start next month.
“We are supposed to get the coffee from central (region) starting December but we might witness a scenario where rains will interfere with the drying of the produce, hence causing delays in deliveries,” he said.
Mr Mbithi said NCE foresees a situation where this crop might get to the auction starting February or March.
During this week’s auction, the value of the premium grade AA also dropped from the previous week’s Sh24,150 to Sh22,575.
This came as a global report from the International Coffee Organisation (ICO) released this month indicated global daily coffee prices in the world hit a 19-month low last month, partly negatively affected by the currency volatility.
ICO said further volatility in the price of the beverage could be provoked by the anticipated El Niño, forecast to be one of the strongest on record, potentially disrupting rainfall patterns in several producing countries.
At the New York exchange, where Kenya’s coffee trades, the prices have remained at a low of 166 dollar cents a pound, unchanged from last week’s auction.
Kenyan coffee is in high demand, mainly in the United Kingdom and the United States, with traders buying it for blending with lower quality beans from other parts of the world.
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