Coffee prices have increased by 27% over the last one year according to a trading report issued by the Nairobi Coffee Exchange (NCE).
NCE CEO Lisper Ndungu while releasing the report said the coffee prices increased by 27.46% from an average of US$199.34 to US$254.07 in October 2024 per 50kg bag.
She said the increase was occasioned by a steady increase in the New York InterContinental Commodity Exchange (ICE), which works as the benchmark for Arabica coffees.
Ms Ndungu said the volumes sold through the auction also went up in the current period as compared to the same
cumulative period last year by more than double at 116.55% from 22,396 to 49,667 of 60kg bags.
With the increase in the volume, the overall value of the coffee sold increased as well from US $5,655,951.68 to US$15,663,698.66 marking a 176.94% increase from the previous period.
“This can be attributed also to more coffees finding their way to the auction floor as compared to the previous period when the industry was coming to terms with the change in regulations whilst there was also a milling crisis,’ she noted.
Ms Ndungu made the remarks at a Nairobi hotel where her organisation was holding a coffee cupping session in collaboration with Solidaridad and Fairtrade.
She noted that Arabica coffee prices have generally been on an upward trajectory with rising global arabica prices
on the New York Intercontinental Commodity Exchange causing Kenyan coffees to maintain a steady average hence ensuring prices are competitive in the national market.
The global coffee prices are currently favorable due to a combination of factors affecting supply and demand such
as: Supply Concerns: There have been significant supply concerns in major coffee producing regions like Brazil and Vietnam.
Brazil, which produces 40% of the world’s coffee, has experienced erratic weather conditions, including excessive rainfall followed by drought, which has impacted coffee crops.
Vietnam, the largest producer of robusta coffee beans, has faced drought conditions leading to a notable drop in coffee production.
Increased Demand: Global coffee consumption has been increasing, and demand has now far exceeded supply. This imbalance between supply and demand has contributed to the rise in coffee prices.
Geopolitical and logistical issues: Port congestions, shipping delays, and geopolitical unrest have further aggravated supply concerns, supporting the price hike.
Climate patterns: The El Nino climate pattern has also played a role, causing unusual weather patterns in coffee growing regions, which has affected coffee yields.
