Low quality beans cut coffee price at Nairobi auction by nine per cent
Traders follow the auction at the Nairobi Coffee Exchange last March. PHOTO | SALATON NJAU
The price of coffee at the Nairobi auction dropped nine per cent as low quality beans reversed last week’s fortunes when the value rose 14 per cent.
In the Tuesday auction, a 50 kilogramme bag of coffee was sold at Sh22,644 compared to the Sh24,888 average realised last week.
Nairobi Coffee Exchange (NEC) chief executive officer Daniel Mbithi said that despite the drop in price, demand for good quality coffee was high with some lots selling a 50 kilogramme bag at over Sh51,000.
“The auction witnessed increased demand for good quality beans despite a drop in average price due to some low quality coffee offered for sale,” said Mr Mbithi.
He said the trend was bound to persist for the better part of the month.
The auction has been enjoying high prices since last month on account of high quality from central Kenya.
Coffee remains one of Kenya’s top foreign exchange earners. It is ranked fifth after horticulture, tourism, tea and diaspora remittances.
The industry contributes about 0.2 per cent of national GDP and about eight per cent of total agricultural export earnings. The agriculture sector employs up to 25 per cent of Kenya’s labour force.
In the 2013/14 season, a total of 671,438 coffee bags were traded at the NCE realising $174.1 million in revenues compared to 625,170 bags sold in 2012/13 valued at $127.1 million, improving farmers’ earnings by about 37 per cent.
In the meantime land under coffee cultivation has increased by 3,500 hectares in the last three years as traditional non-coffee growing regions embraced the cash crop.
Land under coffee cultivation shrank by 35 per cent, from 170,000 hectares to 109,795, between 1990 and 2011 as farmers abandoned the crop due to poor management of the sector and low earnings.
The European Union, through the Coffee Productivity Project, has been revamping coffee production by enhancing access to improved inputs and providing technical information.
The project has spent over Sh75 million on 28 coffee nurseries to improve the quality of seedlings.
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