Commodities

Coffee prices up 24pc on higher quality of beans

auction

A dealer samples coffee at the Nairobi Coffee Exchange. FILE PHOTO | NMG

geraldandae

Summary

  • A market report by the NCE indicates the commodity fetched Sh35,856 for a 50-kilo bag on average from Sh27,000 that was recorded in the previous sale.
  • The good value was due to good quality beans and stable prices at the international market that has now hit a 10-year high helping to lift the returns locally.

Coffee prices jumped 24 percent during this week’s auction, marking a second successive session improvement since trading resumed a fortnight ago after a month-long recess.

A market report by the Nairobi Coffee Exchange (NCE) indicates the commodity fetched Sh35,856 for a 50-kilo bag on average from Sh27,000 that was recorded in the previous sale.

The good value was due to good quality beans and stable prices at the international market that has now hit a 10-year high helping to lift the returns locally.

“There was high-quality coffee at the auction this week and it played an important role in lifting the prices,” said NCE.

The auction has not been running every week because of a shortage of beans in the market occasioned by wet weather that has hampered drying.

But the numbers are now picking up with the bags offered for sale this week increasing to 13,000 from 7,883 in the previous trading.

The auction had been forced to cut down the number of bags that it had set as a minimum threshold to allow trading to go on because of the prevailing shortage.

Ideally, the trading requires a minimum of 10,000 bags to jumpstart the sale but in the last two sales, the quantities offered have been below 8,000 bags.

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 200 cents per pound from 144 in April when the auction was going for recess.

The crop coming to the auction is supplied from eastern and parts of western Kenya. It is supposed to run the auction to November when the main season’s produce is expected to get to the market.