Kenya’s earnings from coffee dropped 13 per cent in four months to April compared with the same period last year, on account of low prices for Arabica at the international market.
Data from the Coffee Directorate indicate farmers earned $41 million (Sh4 billion) in four months to January 2019 against $47.7 million (Sh4.77 billion) in the same period last year. The coffee crop year starts in October.
“This scenario can be explained by the fact that the world market prices at ICE in New York, which is our benchmark for Arabica coffees, have been experiencing a 13-year low since November last year,” says Nairobi Coffee Exchange (NCE) chief executive Daniel Mbithi.
He said this affected the average price at the auction with a 50-kilogramme bag dropping from Sh23,000 to Sh19,000 in the review period.
The volumes offered for sale rose by two per cent to 10,571 metric tonnes in the review period from 10,361 metric tonnes the previous season due to good weather at the beginning of the season.
Coffee has been performing well since the beginning of the year with prices rising since the first auction of 2019.
The NCE last month said the good prices were expected to hold in the next two months as the main crop from central Kenya continues to enter to the market.
“We anticipate that the current prices will maintain for the next two months if the quality coming in is consistent,” the NCE had said.
The coffee traded at the auction has been coming from the main crop season in central Kenya after the short crop from eastern and western Kenya ended last year October.
The country seeks to raise the amount of coffee roasted locally from five to 10 per cent annually over the next five years.