Top cash crop prices hit 2-year highs at auctions

Kenya’s major export commodities are registering a significantly improved performance in the global market with the prices of auctioned tea and coffee at two-year highs.

Coffee prices have so far gone up 9.3 per cent while the value of tea has grown by 6.3 per cent in the latest sales.

A market report from Nairobi Coffee Exchange (NCE) shows a 50 kilogramme bag of coffee sold at Sh29,973 up from Sh27,398 last week, which is the highest price in the last two years while tea prices at the Mombasa auction hit a high of Sh286 a kilo last Tuesday, up from Sh268 the previous week.

The increase in price of coffee is attributed to higher prices at the world’s largest auction in New York, with which others benchmark.

NCE chief executive Daniel Mbithi said the good prices are also due to good quality crop from central Kenya.

“The price has registered a two-year high in this week’s auction mainly because of good prices at the New York Coffee Exchange and increase in good quality crop from farmers,” said Mr Mbithi.

The price of coffee at the New York Exchange had gone up from 248 cents a pound last week to 254 in this week’s trading.

Mr Mbithi expects the trend to continue in the coming weeks amidst good volumes from growers.

READ: Coffee price rises 5 per cent on high demand at global market

Grade AA, Kenya’s top quality bean, also registered an impressive performance, rising from Sh55,620 last week to Sh63,036 in the latest sales.

The government this week projected a record growth of tea earnings to Sh133 billion this year driven by good prices and reduced volumes.

The ongoing drought is expected to cut tea production by 12 per cent to 416 million kilogrammes down from 473 million kilogrammes.

The export volumes are expected to drop by the same margin while export earnings rise.

The value of Kenyan coffee rose 69 per cent in the three months to December due to a price increase of nearly one third.

The beverage earned the country Sh2.6 billion between October and December compared with Sh1.5 billion realised in the corresponding period in 2015.

The average price of a 50-kilogramme bag of coffee rose to Sh22,000 last year from Sh17,300 in 2015, representing a 30 per cent growth.