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Commodities

Coffee earnings decline by Sh2.5 billion in eight months to May

Daniel Mbithi
NCE chief executive Daniel Mbithi. FILE PHOTO | NMG 

Coffee earnings dropped by Sh2.5 billion in eight months to May on account of low volumes as the quantities offered at the trading floor was impacted by the closure of auction floor by the Health ministry as a mitigation measure to curb Covid-19.

Nairobi Coffee Exchange (NCE) data indicates the cash crop fetched Sh7.8 billion in the review period, down from Sh10.3 billion in a similar period last year.

The decline in earnings resulted from a sharp drop in volumes, which were down 32 per cent compared to the previous period.

NCE chief executive Daniel Mbithi says the volumes dropped from 485,962 bags of 60 kilos to 326,383 bags kilos on market disruption.

"Due to the drastic drop in the volume of coffee traded at the exchange, the value also went down by 24.19 per cent," he said.

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"The cause for the drop might be due to the disruptions at the trading floor in March, 2020 by the Ministry of Health due to the Covid-19 pandemic, which forced some marketing agents to sell some of the coffee through other marketing channels."

The average price per bag registered a significant jump to record Sh19,320 up from previous Sh17,220, boosted by good demand and high prices at the New York Exchange, where Kenya sells close to 95 per cent of its produce.

The Agriculture ministry has given both the coffee and tea auctions two months to transit to electronic platforms to forestall disruptions witnessed this year, occasioned by Covid-19.

Kenya has one of the best coffees in the world, highly sought by roasters for blending with low-quality beans.

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