Market News

Low global prices cut Kenya coffee earnings by Sh1.3bn

A coffee roaster samples the commodity at the Nairobi Coffee Exchange. FILE PHOTO | NMG
A coffee roaster samples the commodity at the Nairobi Coffee Exchange. FILE PHOTO | NMG 

Kenya’s earnings from coffee dropped by Sh1.3 billion in the six months to March compared with a similar previous period due to low international prices and reduced volumes at the auction.

Data from the Nairobi Coffee Exchange (NCE) indicates the value of coffee dropped to Sh10.4 billion in the period under review from Sh11.7 billion, representing an 11.47 per cent decline.

“The low price was caused by the international prices that plummeted to the lowest in two years from a high of 150 cents per pound to average 120 cents per pound,” says Daniel Mbithi, chief executive officer, NCE.

Mr Mbithi said the drop affected the average price at the auction with a 50 kilogramme bag falling from Sh26,300 to Sh24,600 in March.

The volumes offered for sale also declined from 22.4 million kilos last year to 21.1 million kilos in the review period with the drop attributed to withdrawal of the crop in the market due to poor prices.

“There was a slight drop in volumes offered compared with the same period ending March 2O17.

This may be have been caused by lower prices experienced at the auction leading to more coffee being withdrawn from the sales,” said the CEO.

Coffee has been performing well since the beginning of the year with prices being on upward trajectory since the first auction of 2017.

The rally saw the value of a 50 kilogramme bag of the produce hit Sh38,784 last month, making it the highest price the auction has witnessed in the last one year. The prices have, however, started coming down with the latest sale held this week recording Sh17,900.