Commodities

Coffee earnings fall by Sh422m on low quality

coffee

Bad weather between November and December affected drying of beans. FILE PHOTO | NMG

Coffee earnings fell by Sh422 million in the year to December 2017 on low quality.

A report by the Nairobi Coffee Exchange (NCE) indicates the value of the beverage dropped to Sh2.2 billion from Sh2.6 billion in December 2016.

“The value declined because of the delay of quality crop from getting to the market on time, forcing the auction to contend with lower quality coffee that did not earn much from sales,” said NCE chief executive Daniel Mbithi.

The price of the beverage dropped by about Sh2,400 for a 50-kilogramme bag to Sh21,115 in the period under review from Sh23,484 in December 2016.

Mr Mbithi said bad weather between November and early December — when most parts of the country witnessed heavy rain — affected drying of the beans.

The auction was hit by a string of poor prices from mid-last year following a decline in quality crop supply.

The price has, however, rebounded following the streaming in of good quality crop from central Kenya.

A 50-kilogramme bag was sold at Sh22,557 in last week’s trading, which is one of the best prices in recent months.

READ: Coffee price drops marginally as quality beans trickle into market

The drought witnessed in the first quarter of 2017 helped to boost the earnings by 10 per cent as at the end of August 2017 as price rose.

NCE said the crop earned Kenya Sh15.3 billion in the year ending August 2017 compared with Sh13.9 billion realised in corresponding period in 2016.

The government is seeking to raise the amount of coffee roasted locally by five to 10 per cent annually over the next five years.

Most of Kenya’s coffee is exported as beans and just five per cent is roasted locally.

But even as Kenya seeks to expand its market, productivity per bush has dropped from 10 kilogrammes in the 1980s to two currently and the government is trying to lure farmers back to tending the cash crop.