Coffee price rebounds 10pc on high quality central Kenya beans

 

The price of coffee shot up 10 per cent in this week’s trading at the Nairobi Coffee Exchange (NEC) after a 14 per cent dip last week.

The increase was attributed to high quality beans that farmers and cooperatives supplied at the auction. In Tuesday’s auction, a 50 kilogramme (kg) bag was sold at Sh24,990 on average compared to Sh22,644 last week.

NCE chief executive Daniel Mbithi said the general demand for good quality coffee was evident with some lots selling at over Sh51,000 for the 50 kg bag.

“The auction witnessed increased demand for good quality beans and this is the main reason why the prices went up this week,” said Mr Mbithi.

The auction has been enjoying good prices since last month as the much-sought after high quality beans from central Kenya started trickling into the market. Harvesting of the main crop from the eastern part of the country came to an end last November.

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African coffee producers expect low prices

 

African coffee producers expect low prices on the world market in 2016 as high output from Brazil could hurt the prospects for any increase.

“Brazilian production is quite high for the coming season, so there is no shortage of coffee and therefore the market can’t support high prices,” Abdullah Bagersh, Chairman of the Africa Fine Coffees Association, said in an interview. “Could prices go lower? Yes, of course because we have seen lower prices than where we are now. So we cannot discount that the market cannot go lower.”

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Quality coffees still on demand at auction

By Daniel Mbithi

Coffee auction at Nairobi Coffee Exchange witnessed a continued demand for high quality beans. Despite the slight drop in the average price from $244.44 to $222.63 due to some lots of low quality on offer, the general demand for good quality was evident with some lots going well over the $500 mark per 50 kg.

This trend is anticipated to continue for the better part of the month.

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Quality pushes Coffee prices up at the exchange

Coffee average prices surge to a year high of $244.44 per 50kg in yesterday’s auction as compared to last week’s $214.68 marking a 14% increase, fueled by increased coffee quality witnessed in the market. Similar prices were witnessed last in February, 2015.

Grade AA rose from an average of $265.75 last week to $314.37 this week, while grade AB moved from $225.10 to $246.78

New Ngariama FCS, Kamwangi Factory from Gichugu in Kirinyaga, posted the highest price at $566 per 50kg for its AA grade of 133 60kg bags followed closely by Nyeri's Barichu FCS, Gatomboya Factory in Karatina at $ 534 for 153 60kg bags. Ngunguru Factory of Tekangu FCS in Karatina also was third with a $533 for its 54 bags.

These prices come at a time when the international prices have plummeted to a two-year low (see an earlier story before this) indicating that quality is an important factor in pricing!

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Resumption of the weekly Auctions

The Nairobi Coffee Exchange weekly auctions resumed today after 4 weeks Christmas recess break.

We are currently receiving the main crop coffee mainly from the central region of Mt. Kenya. It is anticipated that we shall have about 25,000 bags (60kg) on offer per week for the next 2 or 3 months.

Despite the low global prices at ICE New York caused by the favorable weather forecast in Brazil, the strong US dollar leading to a weakening of the Brazilian currency, the weak Chinese economic data and probably the Middle East political tension, we are witnessing relatively encouraging prices well above that benchmark.

By Daniel Mbithi 

Coffee drops to two-year low on Brazil crop forecast

Coffee output in Brazil, the world's top producer and exporter, may rise by as much as 20 per cent to a record in 2016 as rain boosted crops and expanded plantings.

Growers may reap between 49.1 million and 51.9 million bags, up from 43.2 million bags in 2015, the Agriculture Ministry's crop-forecasting agency known as Conab said Wednesday in its first forecast for the next harvest. Arabica production may increase as much as 24 per cent while robusta output is seen rising up to 8 per cent.

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