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Commodities

Coffee prices jump 6 percent in auction

Nairobi Coffee Exchange
Coffee beans on display at the Nairobi Coffee Exchange. FILE PHOTO | NMG 

The value of Kenya’s coffee edged six percent in this week’s trading, helped by higher quality beans and a price surge at the New York Exchange.

A market report from the Nairobi Coffee Exchange (NCE) indicates that a 50-kilogramme bag of coffee fetched Sh11,435, up from Sh10,712 last week.

NCE chief executive officer Daniel Mbithi said the good quality of beans raised demand for the commodity hence impacting positively on the price.

“New York registered high prices this week, which helped to lift up the value of the local commodity,” said Mr Mbithi.

The price of coffee at New York, which had been low in the previous two weeks, shot from 95 US cents (Sh98.61) per pound last week to 104 US cents (Sh108) in the latest sale.

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Kenya sells over 95 percent of its coffee to the international market.

Mr Mbithi, however, said the trend in good prices might not hold for long as volatility persists with expected high volumes from leading producers poised to have negative impact on earnings in the coming days.

The Coffee Directorate has been campaigning over the years to have Kenyans increase the consumption of the beverage to cut overreliance on the world market to cushion the price from external shocks.

Low quality coffee coupled with depressed international prices of the produce in the world market have tended to push down the value of coffee at the auction in the last six months.

Coffee earnings dropped by Sh3 billion in the 11 months to August on what the auction attributed to low international prices.

The crop earned the country Sh11 billion at the end of last month, down from Sh14 billion that was realised in the same period last year.

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