Commodities

Blow to farmers as State shuts coffee auction

coffee

Coffee auction has become the latest victim of the coronavirus after the Ministry of Health ordered its closure last week as the government races to curb the spread of the disease. FILE PHOTO | NMG

geraldandae

Summary

  • Coffee auction has become the latest victim of the coronavirus after the Ministry of Health ordered its closure last week as the government races to curb the spread of the disease.
  • The directive to the Haile Selassie Avenue-based Nairobi Coffee Exchange (NCE), which was issued in the middle of trading last Tuesday, is set to affect lots that had already been offered for sale during the auction with the impact trickling down to the long-suffering farmer.
  • Chief executive officer of NCE Daniel Mbithi said the auction would not continue following the move and as it awaits further direction from the ministry on the way forward.

Coffee auction has become the latest victim of the coronavirus after the Ministry of Health ordered its closure last week as the government races to curb the spread of the disease.

The directive to the Haile Selassie Avenue-based Nairobi Coffee Exchange (NCE), which was issued in the middle of trading last Tuesday, is set to affect lots that had already been offered for sale during the auction with the impact trickling down to the long-suffering farmer.

Chief executive officer of NCE Daniel Mbithi said the auction would not continue following the move and as it awaits further direction from the ministry on the way forward.

"The directive was issued last week by the Ministry of Health directing us to close the auction. We are waiting for further guidance from them but until then the auction remains shut," said Mr Mbithi in an interview.

The closure comes just two weeks after the tea auction in Mombasa was temporarily closed, before intervention by stakeholders, which saw the move reversed.

The closure will have a negative impact in the world as roasters across the globe rely on Kenyan coffee, because of quality to blend with other low quality beans.

The country sells over 95 percent of its coffee to the world market with Kenyans consuming a paltry five percent through local sale.

The indefinate closure is set to hit farmers' income as it implies coffee cannot be sold at the facility.

The auction has been getting the main season crop from central Kenya after the short-term crop came to an end in November.

The prices had relatively picked with a 50-kilogramme bag fetching Sh20,000 in the last sale before the closure last week. The move will result in an increased supply of unsold coffee in the market probable impact on the future price.

Coffee earnings dropped by Sh2 billion at the end of February compared with the same period last year.

A market report by the NCE indicated the crop earned Kenya Sh6.6 billion at the end of last month, down from Sh4.5 billion the previous year.