Coffee Prices Slightly Gain As Main Crop Season Hit The Market

By Jane Muia / Published December 13, 2022 | 1:20 pm

KEY POINTS

In the eight months to August 2022, the coffee earnings increased by $81 million compared with a similar period in the last crop season.

KEY TAKEAWAYS

Kenya sells more than 95 percent of its coffee to the world market. If the demand for the commodity in the world market decline, it means that the local prices will be highly impacted given that the international prices are used as a benchmark for the local price at the Nairobi Coffee Exchange.

Coffee prices slightly gained in the latest sale as the volume of quality beans increase in the market. Data from the Nairobi Coffee Exchange (NCE) indicate a 50-kg bag of the beverage fetched $188 (23,095 shillings) up from $180 (22,113 shillings) in the previous sale.

“The prices went up during the sale because of quality beans that we are now getting from farmers,” said Daniel Mbithi, chief executive officer of NCE.

The auction is now receiving produce from Central Kenya for the main season which normally hits the market in December. The prices are however projected to be unfavorable this crop season owing to a projected surplus of the commodity in the world market occasioned by a good crop from Brazil and Central America.

Brazil-the world’s largest grower last year experienced low production as a result of bad weather, setting the stage for good earnings for Kenya’s coffee.

The country is now projecting to make a kill this crop season as favorable weather has prompted coffee tree flowering with the trend expected to continue over the next months. Colombia, Central America, and Mexico are also witnessing good weather for harvesting.

If demand for Kenya’s coffee fall it also means that earnings for this crop year will fall compared to the previous crop season despite having recorded impressive performance. For instance, 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. The earnings in this period were up 62 percent to hit $210 million compared with $129 million in a similar period last year.