A variety of Coffee beans from various farms all over the country on display for auction at the Nairobi Coffee Exchange (NCE) located along Haile Sellassie Avenue on October 2, 2018.
The value of coffee sold at the Nairobi Coffee Exchange (NCE) has increased by 93.4 percent in the first seven auctions of the 2024-25 marketing season, driven by higher volumes.
Coffee buyers have purchased cherries worth $22.8 million (Sh2.94 billion) through the auctions that resumed last month, nearly double the $11.8 million (Sh1.52 billion) they bought during a similar period last year.
The higher earnings were primarily driven by an increase in volumes by 41.7 percent to 4,388,168kg sold in the seven auctions that have been held so far, up from 3,095,780kg that had been sold at the same stage last season as well as better prices.
While this has hugely benefited importers, it has hurt the earnings of exporters of crops such as coffee, tea, and horticultural products as they now have to exchange US dollars for less Kenya shillings.
The volume of coffee beans brought to the auction, which is held every Tuesday on the floor of the exchange, has increased sharply this season due to good harvests of the crop across the country.
The better yields follow ample rains that have been received during the year, contrasting sharply with the biting drought that affected the production of cherries in the 2023-24 marketing season.
“The current season’s crop is dependent on last year’s weather patterns,” NCE chief executive Lisper Ndung’u told the Business Daily.
The main coffee grades sold at the exchange are AA, AB, C, E, PB, T, and TT, which often fetch the highest price. The auction also attracts miscellaneous grades HE, NH, SB, UG, UG1, and UG2. Meanwhile, unwashed coffee grades that are also traded at the exchange are MH and ML.
Once coffee is sold to buyers through the auction, the proceeds are deposited into the Direct Settlement System provided by the Cooperative Bank of Kenya, from which the growers are paid net of contract and any statutory charges.
About 78 percent of Kenya’s coffee is sold at the auction, according to data from the Agriculture and Food Authority. The remainder is sold by farmers through their marketing agents directly to buyers.
