Coffee Prices Decline On Low Demand

Coffee prices have declined on the back of low demand in the world market. In the latest sale, a 50 kg bag of the beverage recorded a decline to stand at $189 (22,886 shillings) from $191 (23,111 shillings) recorded previously.

There is also a projected surplus of the commodity in the world market occasioned by a good crop from Brazil and Central America. This has interrupted the local prices given that the international prices are used as a benchmark for the local price at the Nairobi Coffee Exchange (NCE). Kenya sells more than 95 percent of its coffee to the world market.

At the New York Coffee Exchange, the price of Arabica fell for the seventh consecutive session this week to hit the lowest in nearly 13 months.  Kenya, among the top five coffee producers in Africa, produces 800,000 bags of coffee annually. The coffee industry export earnings have improved by 33 percent between 2014 and 2021.

In 2020, Kenya exported USD 229 Million in coffee, making it the 25th largest exporter of coffee in the world. In the same year, coffee was the 5th most shipped product in Kenya. The fastest-growing export markets for Coffee in Kenya between 2019 and 2020 were the United States, Switzerland, and Germany.

In the eight months to August 2022, the coffee earnings increased by $81 million compared with a similar period in the last crop season. This was helped by a high volume of the bean at the auction which was 46 percent higher amid high demand.

Data from the NCE indicates that the earnings in this period were up 62 percent to hit $210 million compared with $129 million in a similar period last year. The number of bags sold through the auction increased by 52.58 percent from 377,204 in the previous season to 575,543 at the end of the review period.

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