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High demand pushes December coffee prices to record Sh860 a kilo
A variety of Coffee beans from various farms all over the country on display for auction at the Nairobi Coffee Exchange (NCE) located along Haile Sellassie Avenue on October 2, 2018.
The average price of coffee sold at the auction Nairobi Coffee Exchange (NCE) hit a historic high of Sh859.40 per kilogramme during the December 2024 sale, fuelled by elevated demand for the fresh high-quality crop that entered the market at the time.
The record price coincides with the October-December main coffee crop season in Kenya when the NCE receives freshly harvested high-quality crops from cooperative societies.
Auction prices traditionally improve around this window on higher demand for the quality crop.
Data from the Kenya National Bureau of Statistics (KNBS) shows the volume sold during the month stood at 3,314.70 tonnes, the highest since June of the same year when the quantity stood at 4,523.73 tonnes.
Last December’s pricing translated to a 46.01 percent jump from the Sh588.57 per kilogramme(kg) recorded during a similar month in 2023, at the height of chaotic trading operations fueled by a set of reforms that were spearheaded by then Deputy President Rigathi Gachagua.
About volumes, last December marked a marginal 9.1 percent from the 3,039 tonnes auctioned in December 2023.
Last year, the largest volume sold was in April when it hit 6,878.66 tonnes, at a time the price averaged Sh654.32 per kg.
About 78 percent of Kenya’s coffee is sold at the auction, according to data from the Agriculture and Food Authority (AFA). The remainder is sold by farmers directly to buyers through their marketing agents.
Last week, farmers bagged a win after the Capital Markets Authority capped the service fees on the gross value of crops traded on the NCE at a lower 1.8 percent, translating to enhanced savings for growers who market their produce through the weekly auction.
Coffee, one of the main cash crops in the country, is grown in at least 33 counties. The country’s coffee is much sought-after by roasters and blenders, and international prices are used as a benchmark for the local price at the NCE.
However, due to sustained mismanagement of the value chain which has over the years given rise to low returns, many farmers have ditched the crop over time in favour of more lucrative crops.
As a result, domestic production of coffee has dwindled from a peak of 128,637 tonnes in 1988 to just 48,700 tonnes in 2023.
