BusinessNews

Coffee farmers earn Sh 1.1b from this week’s sale as prices drop by 20%

Coffee prices at the Nairobi Coffee Exchange (NSE) dropped by 20% during this week’s sale on Tuesday compared to last week to earn farmers Sh 1.1 billion from the 26,328 bags offered.

A market analysis by Henry Kinyua – a coffee expert – revealed that the average price decreased by 20% to $232 from the previous $290 per 50kg bag sold last week (Sale Number 18). The average price is equivalent to Ksh 103 per kilo of cherry and the highest price achieved was $498 per 50kg bag from Kii wet mill (Factory) in Kirinyaga.

A total of 26,328 bags (50kgs) of coffee were traded, signifying an 13% decrease from the 30,272 bags traded in Sale Number 18 last week. The high price is equivalent to Ksh 222 per Kilogram of cherry at Factory gate. In this sale 831 bags or 3% of volumes traded that fetched more than $400 per bag.

The top 10 coffee lots were from factories in counties of Kiambu, Embu, Nakuru and Kirinyaga. These includes: Kii (Rung’eto FCS) from Kirinyaga whose coffee fetched highest price,Karinga and Karatu (Gitwe FCS) from Kiambu, from Kirinyaga county we had Kii, and Kiangoi all part of Rung’eto Farmers’ Cooperative Society and Kabingara from Karithathi Farmers’ Cooperative Society

The total earnings from Sale Number 19 amounted to $7,510,865or approximately Ksh 1.1Billion. Notably, 18,007 bags, or 68% of the volumes traded, were grades AA and AB.

“As always, a report on a single sale doesn’t reflect the total sales and returns from any factory cooperative or county. Coffee is processed and traded at different times, and factories present coffee to the market in multiple sales before determining the final price paid for all their traded coffee,’ he said.

He added that, one sale or even a couple of sales only serve as directional indicators of market performance advising farmers to follow the coffee journey to the end.

“If you are a coffee farmer, find out which broker is handling your coffee then follow and see how many lots are presented and prices they fetched. Do this until all the coffee from your factory and cooperative have been sold. Sum it all up to establish amounts paid for your coffee, then follow up deductions at factory level to arrive as final price paid to farmers.’ he said.

To estimate the price per kg of cherry from market reports, take the highest price paid per bag (e.g., $498) and multiply it by the dollar rate (e.g., 146). Then, divide by 50 (50kg per bag) and further divide by 6.5 to get the kilos of cherry. Using this formula: (499 * 145) / 50 / 6.5 = 222. So, $498 per bag ~ $10 per Kg of clean coffee, equivalent to Ksh 222 per kg of cherry.

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