Coffee prices drop 12pc as season ends

The value of Kenya’s coffee dropped 12 percent as the season came to an end last week, marking one of the biggest declines to be registered in 2020. FILE PHOTO | NMG

By GERALD ANDAE
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Summary

• The value of Kenya’s coffee dropped 12 percent as the season came to an end last week, marking one of the biggest declines to be registered in 2020.
• Market report from the Nairobi Coffee Exchange indicates that a bag on average earned Sh22,032 in the latest sale, down from Sh24,732 previously.
• The decline has been attributed to low quality coffee in the market during the auction.

The value of Kenya’s coffee dropped 12 percent as the season came to an end last week, marking one of the biggest declines to be registered in 2020.

Market report from the Nairobi Coffee Exchange indicates that a bag on average earned Sh22,032 in the latest sale, down from Sh24,732 previously.

The decline has been attributed to low quality coffee in the market during the auction.

The coffee season normally comes to an end in September, with the new crop year starting in October ahead of the main season that usually starts around November.

“The prices went down on account of lower quality that was offered at the auction in the latest sale,” said NCE.

Subsequently, Kenya’s premium coffee recorded a decline in earnings during the sale with the price per bag quoted at Sh31,536 from Sh32,832 in the previous auction.

NCE is optimistic that the price of the commodity will pick up next week as they expect some good quality beans at the trading on Tuesday.

At the moment the auction is getting crop from parts of eastern and western Kenya with the main crop season from central expected to hit the market starting next month.

Coffee prices have been oscillating in the past season with earnings dropping by Sh2.4 billion in the eight months to August compared with the same time last year as the sector reeled from the effects of Covid-19.

Data from the Central Bank of Kenya shows that coffee exports in the eight months to August stood at Sh17.13 billion ($158 million), down by 1.25 percent from the Sh17.34 billion ($160 million) recorded in the corresponding period last year.

Kenyan coffee production has been declining from a high of 130,000 tonnes realised in the late 80s to the current 40,000 tonnes.

Majority of the smallholder coffee farmers are currently producing less than 2kg per tree per year against an annual potential of 35kg per tree.

The government has put in place a number of measures in place to try and revitalise one of the country’s major foreign exchange earners.