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Commodities

Coffee earnings drop by Sh2.4bn

Coffee earnings for the eight months to August dropped by Sh2.4 billion compared with a similar period last year
Coffee earnings for the eight months to August dropped by Sh2.4 billion compared with a similar period last year. FILE PHOTO | NMG 

Coffee earnings for the eight months to August dropped by Sh2.4 billion compared with a similar period last year, as the sector suffered from effects of Covid-19 on input supply chains and lower quality bean.

Market report from the Nairobi Coffee Exchange (NCE) indicates that the crop had earned Kenya Sh9 billion by the end of last month, down from Sh11.4 billion in corresponding period last year.

According to NCE, the low earnings resulted from lower quality coffee as the supply of farming inputs was disrupted following restrictions imposed in the country to curb coronavirus spread.

“The drop has been caused by low volume coffee sold at the auction, occasioned by the Covid-19 pandemic that made it difficult to access farming inputs, which also contributed to a decline in quality,” said the NCE.

The average price went up to Sh20,088 during the period from Sh16,740 for a 50-kilo bag in the corresponding eight months of the previous year, with the rally attributed to shortage of coffee that resulted in higher prices in the world market.

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The number of bags traded in the review period was 367,175, down from 556,608 in 2019’s first eight months, representing a 34.03 percent drop.

Coffee prices have, however been on a downward trend since the auction resumed from a one-month recess in July, indicating that the depressed earnings are likely to persist for the rest of the year. In last week’s trading, the value of the commodity declined by Sh65 million as the market continued to witness lower quality beans.

LOW PRODUCTION

A transaction list from the NCE indicated that the value dropped from Sh378 million witnessed in the previous auction to Sh313 million in the sale held this week.

Kenya ordinarily produces one of the best coffees in the world, which is highly sought by roasters for blending with low quality beans from other regions.

However, the production has significantly dropped when compared with her peers in the region with Uganda, which was at par with the country in the previous years now widening the gap.

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