The price of coffee sold at the Nairobi Coffee Exchange (NCE) has risen by an average of 13 percent in the first 10 months of the current coffee marketing season, driven by demand.
Data from the weekly auction shows that the average price of a 50-kilogramme bag of coffee sold between October and July rose to $201.4 (Sh25,980), up from an average of $178.14 (Sh22,980) in the same period last year.
The volume of coffee sold through the NCE also increased by 12.18 percent to 35.94 million kilogrammes compared to 32.03 million kilos in the same period of the 2022/23 coffee season.
NCE Chief Executive Officer Lisper Ndung’u has attributed the price increase to increased demand from coffee buyers.
“Overall, there has been a steady demand for Kenyan coffee in the global market despite the fears that Kenyan coffee is not available,” said Ms Ndung’u.
“On average, the prices have remained relatively fair in the national market compared to the global market hence affecting the overall value realised at this time of the year,” she said.
The NCE chief’s comments come at a time when buyers have expressed concern over the shrinking size of Kenya’s coffee production relative to the country’s output. It is highly sought after by roasters worldwide for blending with other coffees because of its acidic taste.
“Kenya has become a niche in the global coffee market and is now producing less than 0.5 percent of the global demand,” Marten Sievers, the regional managing director of leading coffee buyer Neumann Kaffee Gruppe (NKG) East Africa, said recently.
The increase in volumes and prices has seen earnings from sales at the auction soar by 28.79 percent during the current season to $161.72 million (Sh20.86 billion) compared to $125.57 million (Sh16.19 billion) over a similar period last year.
About 78 percent of Kenya’s coffee is sold at the auction. The remainder is sold by farmers through their marketing agents directly to buyers outside the auction. Kenya’s main coffee harvest season runs from October to December.
The higher coffee prices will help growers offset the impact of the Kenyan shilling strengthening against the US dollar this year.
While a weak shilling is usually a boon for local exporters of products such as coffee, tea, fresh fruits, vegetables, and cut flowers as it increases their earnings in Kenyan shillings, a stronger local currency has the opposite effect.
The Kenyan shilling has strengthened significantly against the US dollar this year, rising from a low of Sh163 per unit in January to a high of Sh128 this week.
