Demand for Kenya’s coffee has declined following Brazil’s rebound in production, which had recorded a sharp decline in the last two years, creating a global shortage.
In the latest sale, the price of coffee declined to $198 for a 50-kilogramme bag on average from a high of $215 that had been recorded in the first sale of the new crop year held last week.
Nairobi Coffee Exchange (NCE) chief executive officer Daniel Mbithi says the waning demand is a result of expected growth in volumes at the global market.
“Brazil is expecting a better harvest this season and the drop witnessed in the latest sale is due to a lack of demand for the local crop,” Daniel Mbithi.
The declining demand comes at a time when Kenya is about to start harvesting the main crop that starts hitting the market in November. At the moment, coffee that is trading is from the short-season crop from parts of western and eastern Kenya.
Coffee earnings rose by $81 million in eight months to August when compared with the same period in the last crop season as more volumes were offered at the auction, and high demand pushed up the value of the bean.
Data from the NCE indicates that earnings in the review period were up 62 per cent to hit $210 million when compared with $129 million in the corresponding period last year.
The good earnings were also boosted by growth in volumes, which were 46 per cent higher in the review period compared with the previous season.
The number of bags sold through the auction increased by 52.58 per cent from 377,204 in the previous season to 575,543 at the end of the review period.
