Commodities

Coffee dips below $300 first time this year on quality concerns

coffee

A farmer picks coffee berries in Nyeri, central Kenya. FILE PHOTO | NMG

geraldandae

Summary

  • The development is attributed to the declining quality of the beans as the current crop season is drawing to a close.
  • Data from the Nairobi Coffee Exchange indicates that the price of the produce dropped to Sh31,860 on average per 50 kilo bag when compared with Sh32,508 that it fetched in the previous sale.

Coffee prices at the auction dropped by two percent in last week’s trading, to mark the first time that the commodity is trading at below $300 (Sh33,147) per 50-kilogramme bag since resuming from recess in July.

The development is attributed to the declining quality of the beans as the current crop season is drawing to a close.

Data from the Nairobi Coffee Exchange indicates that the price of the produce dropped to Sh31,860 on average per 50 kilo bag when compared with Sh32,508 that it fetched in the previous sale.

The auction has been registering a marginal decline in value in the last couple of sales with NCE blaming it on a drop of in premium grade, which normally plays a crucial role in lifting the total earnings.

NCE said the decline was negligible and that the prices were still impressive for the last couple of sale when it recorded a drop but traded above $300 at this time of the year, which is normally charachterised with low earnings.

The auction is facing a shortage of quality beans as the short crop season is nearly coming to an end with the impressive earnings being lifted by high global prices.

The main season crop is expected to hit the market starting November of this year.

Currently, the price of coffee at the New York Exchange, which is used as a benchmark for all the world prices, is at a high of over 200 cents per pound from 144 in April when the auction was going for recess, in what has also helped to keep the prices up.

The crop coming to the auction at the moment is being supplied from Eastern and parts of western Kenya and it is supposed to run the auction all the way to November when the main season’s produce is expected to get to the market.