Coffee Earnings Increase in the First Seven Months by 17.21 p.c

Coffee earnings increased in the first seven months up to July by 17.21 percent y/y to 14.3 billion shillings.

This was largely as a result of heightened demand against a backdrop of reduced volumes which shrank 6.39 percent y/y to 29.3 million shillings’ kilograms.

Reduced production of the crop was mainly due to adverse weather conditions in the Mt. Kenya region.

The average price of a 50-kilogramme bag at the bourse was elevated to 24,308 shillings from 19,467 shillings in 2016; boosted by the relative appreciation of the dollar.

Auction operations will resume in the week after taking a one-month hiatus in May following a death in a quality bean.

According to the Leading Economic Indicators Report released by the Kenya National Bureau of Statistics (KNBS), the quantity of coffee auctioned at the Nairobi Coffee Exchange declined from 4,562.82 MT in April 2017 to 1,639.23 in May 2017 while the average auction price decreased from 99.26 shillings per kilogram to 276.43 shillings per Kilogram over the same period.

Despite a decrease in the annual output, Kenyan coffee is still being highly sought after in the international market. Kenya is known globally for producing fine Arabica coffee that fetches premium prices, locally and internationally. It is used for blending other coffee.

There is a huge market in the US and other countries around the world. The government plans to increase coffee exports to the US to more than 25 percent from the current less than 10 percent, Agriculture and Food Authority interim director general Alfred Busolo said.

The auction report at the end of last month showed a 50kg bag of grade AA, the country’s topmost premium quality coffee, sold for 40,354 shillings in February.

The average lowest price achieved per month for all the grades reached 13,391 shillings, compared to the average highest attained of 29,249 shillings in February this year, the report said.

During the review period, the number of bags of coffee bought at auction decreased to 479,373 bags at end of last month. This is down from 514,321 bags offered for sale in the same period last year, representing a 6.79 percent decrease.

Read: Kenya’s tea earnings drop in May due to subdued export volume