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Commodities

Major commodities register mixed fortunes in the ending year

Depressed earnings of coffee in 2018 were
Depressed earnings of coffee in 2018 were occasioned by low international prices in the world market whereas reduced income from tea has been attributed to increased volumes at the Mombasa auction. FILE PHOTO | NMG 

Kenya’s major export commodities registered mixed fortunes in the year with the prices of coffee and tea oscillating between highs and lows.

Whereas the price of coffee picked in the last quarter of 2018, tea prices have dropped significantly hitting a two-and-a-half-year low.

Depressed earnings of coffee in 2018 were occasioned by low international prices in the world market whereas reduced income from tea has been attributed to increased volumes at the Mombasa auction.

“International prices were very low this year and this has had a negative effect on the local cost. It was a hard year for coffee farmers,” says chief executive officer of Nairobi Coffee Exchange Daniel Mbithi.

Despite an increase in volume of coffee traded at the auction in 2017/2018 crop year, the value of the produce declined 8.78 percent from Sh15.9 billion to Sh14.5 billion.

Average prices also reduced from Sh23,300 to Sh20,000 per 50 kilo bag in the year to October 2018, compared with the previous season last year.

“These price trends can be explained by the plummeting of global prices that have since hit a 12-year low record,” he said.

However, Mr Mbithi says 2019 will start on a good note with expectation of good crop from the main crop season in central Kenya, which is forecast to push up the price.

At the last auction of 2018, a 50 kilo bag of coffee on average fetched Sh18,000 on average after declining from a high of Sh20,000 in the previous sale.

Tea farmers are bracing for reduced earnings next year following poor performance of the beverage in the second half of 2018.

In the latest trading held last week, a kilo of processed tea fetched Sh218 on average.

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