Coffee auction suspended as drought persists in growing zone

A shortage of supplies saw trading at the Nairobi Coffee Exchange (NCE) suspended on Tuesday, underlining the drastic effects of prolonged drought in key growing areas.

The NCE chief executive Daniel Mbithi said the volume of coffee delivered could not sustain this week’s auction.

“We did not conduct the auction on Tuesday because we did not get enough coffee for trading,” he said. The auction at this time of the year relies on crop harvests from the eastern parts of the country.

A prolonged drought in much of the first half of this year however cut supplies from the region, piling pressure on trade at the auction which resumed trading in September after a month-long recess.

“The dry spell badly affected crop volumes from the eastern region and this is impacting on our auction sessions,” Mr Mbithi said.

The new crop from eastern Kenya had helped to push up the price to Sh23,587 per 50 kilo bag, which is the highest value the beverage has attained after resuming from a break in July, before dipping to Sh19,467 in last week’s sale. Mr Mbithi said the auction will resume next week after accumulating enough stocks.

Coffee earnings as at the end of August increased 10 per cent due to high demand. NCE said the crop earned Kenya Sh15.3 billion in the year ending August compared with Sh13.9 billion realised in a corresponding period in 2016.

About 85 per cent of the Kenyan coffee is sold through the auction with the remaining percentage sold direct to buyers in overseas.

The government has been pushing for direct sales to enable growers earn much from their crop by eliminating the middlemen who exploit farmers when their crop goes through the auction.