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Coffee earnings decline 40pc in December on wet weather

by biasharadigest
Market News

Coffee earnings decline 40pc in December on wet weather

Daniel Mbithi
NCE Chief Executive Daniel Mbithi. FILE PHOTO | NMG 

Coffee earnings dropped 40 percent in December compared with the same period last year following low volumes at the auction.

Market report by the Nairobi Coffee Exchange (NCE) indicates the crop earned Kenya Sh1.3 billion in the month, down from Sh2.2 billion realised in the same period of 2018.

NCE Chief Executive Daniel Mbithi said depressed earnings resulted from low volumes as most of the coffee from the main crop season did not get to the market due to wet weather.

“The earnings dropped on low volumes occasioned by continued wet weather witnessed from early October that caused a delay in the drying of the parchment coffee before dry milling,” said Mr Mbithi.

Subsequently the average price went down to Sh15,000 in the review period, from Sh17,500 for a 50-kilogramme bag in corresponding period last year.

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The volume sold during the review period was down to 71,768 of 60-kilogramme bags compared with last year’s 104,026, a 31 percent decline.

Coffee earnings in November dropped by 38 percent compared with the same period last year in what was attributed to a slump in the price of the commodity at the auction at the beginning of the new crop year in October.

NCE indicated the crop earned Kenya Sh1.66 billion last month, down from Sh2.2 billion realised in the corresponding period in 2018.

Kenya has one of the best coffees in the world, highly sought after by roasters for blending with other low quality beans from other regions.

However, the production has significantly dropped compared with her peers in the region with Uganda, which was at par with the country in the previous years now widening the gap.

Since early 1990s to 2010/11 crop year, area under coffee has declined by 35 percent from 170,000 hectares to 109,795 hectares as farmers abandoned the crop due to poor management. Kenya sells more than 95 percent of its coffee to the international market, determining the crop’s value locally.

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