Coffee prices on a year-to-date low as the main season ends

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Kenya’s coffee price drops by 10 per cent in this week’s trading reducing its worth to the lowest level seen since the beginning of the year, following the end of the main crop season.

According to the Nairobi Coffee Exchange, on average a 50kg bag went for Sh 13,696 this week compared to Sh 15,087 in the previous week.

Daniel Mbithi, NCE chief executive, blames the drop to the high volumes of low-quality beans.

“We had high volumes of lower quality this week as the main season comes to an end and that is what pulled the price down,” he said.

The auction started receiving high-quality coffee from Central last year December when the main season was beginning. The trade will close-off in May and reopen in mid-July to let in the short-term crop from Western and Eastern Kenya.

At the end of February, the coffee earning had dropped by Sh 2 billion when compared to last year earning from sales according to the NCE market report.

The government is set to use the recently received capital (Sh1.5 billion) from World Bank to boost the specialty coffee production as well as connect farmers to direct markets expanding the current 12 per cent window for direct markets all in attempt to revitalize the coffee industry.

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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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