Coffee registered a 12 percent decline at the auction on Tuesday as the international price of the commodity continued to plunge.
A market report by the Nairobi Coffee Exchange indicates that a 50-kilogramme bag of coffee fetched Sh18,200 in the weekly trading, down from Sh20,700 in the previous sale.
The current drop marks the first major decline since the beginning of the year.
“The prices have fallen below our expectations and we had not anticipated that coffee would earn this less at this time of the year,” said Daniel Mbithi, chief executive at the NCE.
The trading also saw Kenya’s premium coffee grade AA record lower earnings of Sh28,400 for a 90-kilogramme bag from Sh28,700 in last week’s sale.
Mr Mbithi says the auction is getting enough volumes of high-quality coffee, which would have helped to maintain high prices. However, prices have been pulled down by low international prices.
The NCE had last month said the good prices were expected to hold up to March as the main crop from central Kenya continues to enter the market.
The price of coffee in the world market has been on a decline since last November when it hit a low of 113 cents a pound before sliding further yesterday to 98 cents per pound.
Kenya exports more than 95 per cent of its coffee to the world market, making it vulnerable to price volatility.
Earnings from coffee dropped 13 per cent in the four months to January compared to the same period last year, on account of low prices for Arabica at the international market.
The Coffee Directorate data show farmers earned $41 million (Sh4 billion) in four months to January against $47.7 million (Sh4.77 billion) last year.