Coffee earnings drop by Sh2.5 billion in eight months to May

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Coffee earnings have declined by Sh12.5 billion in eight months to May, highlighting low volumes caused by the closure of the auction by the government as a measure to reduce the spread of coronavirus. 

According to data from Nairobi Coffee Exchange (NCE), the crop brought in Sh7.8 billion in the eight months to May compared to Sh10.3 billion the previous year within the same period. 

The NCE chief executive Daniel Mbithi says the drop in earnings resulted from the decline of volumes, which saw a fall of 32 percent. The volumes were down from 485,962 bags of 60 kilos to 326,383 bags kilos due to market disruptions. 

“Due to the drastic drop in the volume of coffee traded at the exchange, the value also went down by 24.19 percent,” he said. 

“The cause for the drop might be due to the disruptions a the trading floor in March 2020 by the Ministry of Health due to the Covid-19 pandemic, which forced some marketing agents to sell some of the coffee through other marketing channels.” 

The coffee and tea auctions have two months to migrate to digital platforms a move set to protect the market from the disruptions witnessed this year from coronavirus. 

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Anthony Kiratu is the Founder of Finsolutions. He is a financial analyst with over 5 years experience in research, investment advisory, valuation and financial modelling. Anthony is a member of the Institute of Certified Investment and Financial Analysts and Institute of Certified Public Accountants of Kenya. He is passionate about development of African Capital Markets through training of investors and dissemination of information for sound financial and investment decision making process. He is also a part-time lecturer in the Certified Investment and Financial Analyst course in the subjects of International Finance, Portfolio Management, Equity Investment Analysis, and Fixed Income Securities. Email: anthony@finsolutions.co.ke Contact: +254 780216631

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