Coffee, tea exports record mixed price performance as year ends

Kenya’s major export commodities registered a mixed fortune for the year 2018 with the price of tea taking a deep hit.

Whereas the price of coffee picked up in the last quarter of 2019, tea prices dropped significantly hitting a five-year low at some point by the time the financial year was coming to an end in June.

Decreased earnings for these beverages was attributed to low international prices where Kenya sells almost all the produce.

“International prices were very low this year and this has had a negative effect on the local cost,” said Nairobi Coffee Exchange Chief Executive Daniel Mbithi.

Coffee earnings dropped by 24 percent at the end of the 2018/19 crop year compared with the previous period following a 13 percent slump in the price of the commodity in the international market.

According to NCE, the crop earned Kenya Sh11 billion in the crop-year ended September, down from Sh14.75 billion realised in 2018.

Subsequently, the average price went down by 24.40 percent from Sh20,300 as at end of last crop season to Sh15,300 for a 50-kilogramme bag in the period under review.

However, Mr Mbithi said 2020 would start on a good note as the world prices have so far rebounded by 40 percent, giving growers hopes of better earnings. High-quality beans, he said, are also expected to boost prices at the auction starting January, after wet weather hampered the supply in December.

At the last auction of 2019, a 50-kilogramme bag of coffee on average fetched Sh21,513 up from Sh19,004 recorded in the previous sale.

Tea farmers are likely to face another round of poor earnings next year as the commodity at the auction has been fetching low returns since the beginning of the 2019/20 financial year.

Small-scale tea earnings dropped by 22 percent in the financial year ended June 2019, marking the lowest returns for growers in the last six years.

Farmers affiliated to Kenya Tea Development Agency earned Sh69.7 billion in the review period compared to Sh85.7 billion last year. The prices at the auction have recovered following an upward trend in the last couple of sales but it remains within the five-year low bracket.

In the latest trading held last week, a kilogramme of processed tea fetched Sh212 on average down from Sh208 in the previous sale.