Coffee auction remains buoyant despite 23pc drop in earnings
By Nicholas.Waitathu, March 7, 2024
Nairobi Coffee Exchange (NCE) was vibrant this week even though it recorded a 23 per cent decrease in earnings, a new report indicates.
It remained buoyant with average prices maintaining an over $230 mark for a 50 kilogramme of clean coffee.
A market report by the auction manager, NCE notes that the earnings dropped to $7,510,865 (Sh1.1 billion) but notably 18,007 bags, or 68 per cent of the volumes traded, were grades AA and AB.
Premium grade AA, AB, C and PB recorded the maximum prices of $498 (Sh71,612.4), $430 (Sh61,834), $336 (Sh48,316.8) and $379 (Sh54,500.20) respectively. Lisper Ndung’u, NCE acting chief executive said during the week for Sales No.19, a total of 26,328 bags (50kgs) of coffee were traded, accounting for a 13 per cent drop from the 30,272 bags traded in Sale No. 18 last week.
Market report
The average price decreased by 20 per cent to $232 (Sh33, 361.60) compared to $290 (Sh41, 702) per 50kg bag in Sale Number 18.
“This average price is equivalent to Sh103 per kilo of cherry. The highest price achieved was $498 (Sh71, 612.40) per 50kg bag from Kii Wet Mill (Factory) in Kirinyaga, the market report stated. This high price is equivalent to Sh222 per kilogramme of cherry at Factory gate.
“In this sale 831 bags or 3 per cent of volumes traded that fetched more than $400 (Sh57, 520) per bag,” noted the market report.
Last week earnings recorded a 35 per cent increase, an increase attributed to growing demand and high quality of cleans being presented for sale.
Stakeholders in the coffee industry attribute the impressive performance of the coffee prices to a resounding vindication of the coffee sub-sector reforms that the government has been pushing since 2016 when the Coffee Sector Reform Taskforce led by Prof Joseph Kieyah was appointed by former President Uhuru Kenyatta.
Key components of the reforms championed by the former task force include the establishment of the Direct Settlement System (DSS) which is being managed by the Co-operative Bank of Kenya. The DSS has ushered in price transparency that has greatly rebuilt the trust that farmers have in the coffee auction and the NCE.