The Nairobi Coffee Exchange (NCE) has released a market report that shows that the coffee earnings declined by 24% at the end of the 2018/2019 crop year. This is attributed to the 13 percent drop in commodity prices in the global market.
Kenya earned $109.56 million from coffee, a decrease from $145.22 million earned from the same period in 2018. Daniel Mbithi, NCE’s Chief Executive Officer stated that the low coffee prices were due to the consistent low prices at the New York market.
Kenya trades nearly all its coffee in New York. Thus the average price of coffee for a 50-kilo bag dropped from KSh 20,300 to KSh 15,300 in the period under review.
Coffee peak season ends in June and another season starts in October. Thus Mr. Daniel Mbithi predicts that by the end of the next period, global coffee production will hit 170 million 60 kg bags and consumption is expected to grow by 2.1% to 165 million 60 kg bags making a surplus of about 5 million 60 kg bags.
The surplus is likely to put downward pressure on coffee prices for the rest of the period, therefore reducing the earnings to local farmers.
Kenya produces some of the best coffee in the world. The commodity is highly sought after by coffee lovers all over the world.