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Coffee prices at 12-year low on high supplies in Nairobi

Monthly earnings from coffee have fallen to a 12-year low with the average price of a 50-kilogramme bag declining by 19.74 percent from Sh20,229 in October 2017 to Sh16,237.6 last month.

Producers in October made about Sh809.7 million in the month of October at the Nairobi Coffee Exchange after selling 2,493,243 bags of the beans.

This is an increase from the Sh655.2 million made last year from 1,619,403 bags of coffee. However, despite the volumes of coffee this year significantly increasing, as compared to the same period last year, prices of the cash crop drastically plummeted.

This is contained in market data from the Nairobi Coffee Exchange (NCE) during the 2017/2018 year.

Grade AA of coffee attracted a price of $322.8 per bag, while Grade AB attracted $209.3 for the same quantity.

Kenya and other East African countries with a high degree of dependency on coffee exports, will feel the impact of the falling prices as they rely on coffee export earnings for socio-economic development.

The situation has not only been felt locally as it is a depressing state for coffee traders worldwide with the drop in international prices rekindling memories of the dreaded 2000-2004 crisis.

The Food and Agriculture Organisation of the United Nations says increasing supply against falling demand is the culprit behind the low returns.

Further, top coffee producing countries such as Brazil and Vietnam have continued to expand their capacity while consumption has been on a downward trajectory.


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