Low Market Prices on Arabica Coffee Leads to a 10% Decline on Coffee Earnings

Low Market prices on Arabica Coffee have led to a 10 percent decline on Coffee Earnings from 12.1 billion shillings in April 2017 to 11.7 billion shillings in April 2018, says Nairobi Coffee Exchange (NCE).

According to NCE Chief Executive Officer Daniel Mbithi, the world market prices at ICE in New York have been experiencing a three-year low almost for the whole season on Arabica Coffee, which happens to be Kenya’s most sought coffee type by the international markets.

“This has affected the average price at the auction with a 50-kilogram bag dropping from previous 24,300shillings to 23,000 shillings in April. The volumes offered for sale declined from 26.9 million kilograms in the same period last year to 25.3 million in the review period, with the drop attributed to wet weather at the beginning of the season,” disclosed Daniel Mbithi.

Coffee had been performing well since the beginning of the year with prices on upward trend since the first auction of 2017 up to March.

However, the prices have so far dropped significantly. The rally saw the value of a 50-kilogram bag of the produce hit a high of 38,784 shillings last month.

Kenya may have been grappling with low-coffee production over years but her beans still stand out as the best in the world market, according to the International Coffee Organization (ICO).

During the 16th African Fine Coffee Conference and Exhibition in Uganda, regional and local coffee stakeholders hailed Kenya’s coffee superiority despite the continued decline in production.

Kenya coffee is classified in the category of Colombian Milds or Fine Arabica coffee that fetches the highest prices in the world market. Other countries that produce this type of coffee include Colombia and Tanzania. Uganda has in recent years started producing Arabica but of low quality compared to Kenya.

According to data from ICO, Kenya is number four in Africa in terms of production after Ethiopia, Uganda and Cote d’Ivoire. Though, Uganda’s more than 80 percent of its production is Robusta.