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Coffee earnings fall 38 percent



A coffee farmer in Nyeri. FILE PHOTO | NMG
A coffee farmer in Nyeri. FILE PHOTO | NMG 

Coffee earnings fell 38 percent at the end of November compared with last year following a slump in the price of the commodity at the beginning of the new crop year and low volumes.

Nairobi Coffee Exchange (NCE) indicates the crop earned Kenya Sh1.66 billion at the end of last month, down from Sh1 billion realised in 2018.

Chief Executive Daniel Mbithi said the low earnings resulted from a consistent trend of low prices at the auction and a decline in volumes.

Subsequently, the average price declined to Sh10,000 as at the end of last month down from Sh17,000 for a 50-kg bag.

Coffee’s main crop season normally comes to an end in June with the new season starting in October on the onset of harvesting in eastern and western Kenya.

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The volumes sold during the review period was down to 59,255 of 60kg bags compared with last year’s 78,342.

The decline was occasioned by wet weather that has hampered drying of the produce, hence starving the auction of the new crop.

global prices

It was estimated that at the end of 2018/19, the total production globally would hit 170 million bags (60-kg) with consumption expected to grow by 2.1 percent to 165 million bags thus marking a surplus of about five million bags at the end of the year.

The surplus implies that the prices might remain subdued for the rest of the year, which could impact on the earnings of farmers.

“It should be noted though that the global prices of Arabica coffees at ICE have rebounded from a record low of under US90 cents per pound in May 2019 to almost 126 cents per pound in December 2019,” said Mr Mbithi.

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