Higher returns for coffee farmers as NCE prices soar

Nairobi Security Exchange.

The ongoing coffee reforms are bearing fruit as prices at the Nairobi Coffee Exchange (NCE) shoot up to all-time highs, the last week of February auction has given the solid proof.

During the week’s auction on February 27, 2024, the prices rose to $9 million (approximately KSh717. 5 million), with action volume increasing to KSh1.3 billion where Nyeri coffee posted top prices even as overall prices remained firm.

The highest price achieved was $499 (approximately Ksh71, 606.50) per 50kg bag for Ndaro-ini Coffee Society in Nyeri. This high price is equivalent to KSh224 per kilogram of cherry at factory gate.

The weekly trade saw the volume of coffee traded jump 35 per cent to 30,272 bags on a value of $9 million (Ksh1.3 billion), which is a 35 per cent rise, compared to the previous week that raked in $6.68 million (approximately Ksh958.58 million).

The average price also increased by 19 per cent to $290 (approximately Ksh41, 615) from the previous $244 (Ksh35, 014) per 50kg bag. The average price is equivalent to Ksh130 per kilo of cherry.

The top 10 prices went to coffee societies in Nyeri and Kirinyaga counties, namely: Ndaro-ini, Kangocho, Mutheka and Gathaithi in Nyeri, and Kii, Karimikui, Mugaya, and Kiangoi, all part of Rung’eto Farmers’ Cooperative Society, and Kaguyu of Inoi Farmers’ Cooperative Society from Kirinyaga.

This year has seen a sustained rise in coffee prices, with the number of bags receiving more than $400 (approximately Ksh57, 400) per bag increasing. Notably, 20,716 bags, or 68 per cent of the volumes traded, were premium grades AA and AB.

The sustained rise in prices may be a resounding vindication of the coffee sub-sector reforms that the government has been pushing since 2016 when the Coffee Sector Reform Taskforce led by Prof Joseph Kieyah was appointed. It is remarkable that the newly-licensed coffee brokers that are wholly owned by farmer societies are dominating trade at the auction, Kirinyaga Slopes Company leading the way.


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In addition, the clearing and settlement of trades through the Co-op Bank’s Direct Settlement System (DSS) has ushered in unprecedented levels of price transparency that has greatly rebuilt the trust that farmers have in the coffee auction and the NCE.

During the week, nine brokers or agents presented their clients’ or farmers’ coffee for trading at the auction. Kirinyaga Slopes achieved the highest average price of $289 (approximately Ksh41, 471), followed by Alliance Berries, KCCE Marketing Agency, New KPCU, Kiambu Coffee Marketing Limited, and Kipkelion and Kinya coffee that traded the commodity largely from the Kisii region.

A total of 24 buyers participated in the auction. The top five buyers, led by C.Dormans, purchased 75 per cent of the coffee presented. Others included Ibero Kenya, Kenyacof, Louis Drefus Company, and Taylor Winch.

In a different weekly auction, still in February, a premium $533 (approximately Ksh76, 485) sale for a 50kg bag and a weekly turnover valued at $8.2 million (approximately Ksh1.2 billion) were recorded, being the highest price and trade turnover respectively ever since the new regulatory regime kicked in. This high price is equivalent to Ksh246 per Kilogram of cherry at factory gate.

Coffee from KII Factory, which is part of Rung’eto Farmers’ Cooperative Society in Kirinyaga County, earned the top price. KII factory had 268 bags receiving over $500 (approximately 76,485) per bag. Rung’eto Farmers’ coffee also fetched the highest prices.

Of particular note is that the coffee was offered for sale by Kirinyaga Slopes Brokerage Company Ltd, which is wholly owned by Kirinyaga farmers, and one of the newly licensed coffee traders following the coffee reforms.

A total of 27,046, bags (50kgs) of coffee were traded, signifying a 64 per cent increase from the 16,468 bags traded in Sale Number 1 previously. Eight brokers and agents participated, with Kirinyaga Slopes trading the highest volume of 7,809 bags, of which 5,335 bags or 68 per cent of their coffee were top grades AA and AB.

An upward price trend is emerging in the market, with the number of bags receiving more than $400 (approximately Ksh57,400) per bag increasing to 7 per cent from the constant 2 per cent that the market used to report before. Much of the coffee sold was largely from Kirinyaga, Nyeri and Embu counties.

In addition, 17,522 bags, constituting 65 per cent of the volumes traded, were top grades AA and AB. Likewise, a total of 23 buyers led by C. Dormans, Kenyacof, Ibero Kenya, Louis Dreyfus Company, and Sasini, participated in the auction.

By our reporter

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