Kenya coffee auction records slight increase in earnings despite quality concerns
KENYA – Kenya’s coffee industry recently witnessed a slight increase in earnings, with farmers fetching Kes677.9 million (US$5.18M) from the latest auction held at the Nairobi Coffee Exchange (NCE).
However, concerns persist over the market’s struggle with the delivery of high-quality grades, impacting overall performance.
The auction, which saw participation from 19 local and international buyers, showcased products from 1,133 cooperatives and estates, marking a significant improvement from the previous week’s earnings of Kes615.5 million (US$4.7M).
Notably, Kiburi Coffee Factory products, managed by Alliance Berries Limited, clinched the highest price of Kes39,650 (US$303.25) per 50-kilogram bag of AA grade, purchased by Kenyacof Limited.
NCE Chief Executive Officer Lisper Ndung’u noted that in the auction C-Dorman bought coffee worth Kes174.91 million (US$1.34M), Louis Dreyfus purchased 3,724 bags for Kes114.18 million (US$873,269.59) Ibero Kenya Ltd spent Kes88.5 million (US$676,864.24) for 3,055 bags.
Ndung’u emphasized the diverse sourcing of coffee, underscoring contributions from cooperative societies and estates across various counties.
However, industry expert Henry Kinyua attributed the prevailing low prices in the coffee market to the limited availability of premium grades.
Kinyua stressed the urgent need to enhance the production of top-quality grades, which command higher prices in the market.
“The premier grades delivered at the market are less than 60 percent; thus, there is a need to increase the production of the quality grades that fetch high prices,” said Kinyua.
Alliance Berries Limited, Kirinyaga Slopes, and New Kenya Planters Cooperative Union were among the leading contributors to the auction. Collectively, they delivered 16,411 bags of coffee and earned over Kes500 million.
The positive developments in Kenya’s coffee sector coincide with the recent announcement of a joint commodity trade finance facility between the International Finance Corporation and ABSA Group Limited.
This finance facility, valued at up to US$60 million, aims to bolster Volcafe’s operations in East Africa, benefiting tens of thousands of coffee farmers in the region.
The financing initiative will primarily focus on providing working capital to facilitate various stages of the coffee value chain, including purchasing, processing, and transportation.
Additionally, it will support training programs aimed at promoting sustainable production techniques and agronomy practices, ultimately enhancing farmers’ resilience and profitability.
Liked this article? Subscribe to Food Business Africa News, our regular email newsletters with the latest news insights from Africa and the World’s food and agro industry. HERE
