Why things are looking up for Kenya’s coffee, tea industry

NAIROBI, KENYA: After several disappointing months, farmers and market players are finally seeing marked improvement within the cofee and tea industry. According to Nairobi Coffee Exchange (NCE) Chief Executive Daniel Mbithi, the value of coffee sold at Kenya’s auction climbed 37 per cent to $174.1 million in the year to September, helped by higher global prices and better quality crops.

Tea prices at the Mombasa auction also showed improved and sustained general demand for the 138,269 packages on offer with only 14 per cent remaining unsold. The auction average price was $1.96 from a previous $1.91 in last week’s auction.

Industry players say only 14 per cent remaining unsold was very positive as during bad times they could do hit 25 per cent. East African Tea Trade Association (EATTA) notes that though the prices have been generally low, any positive surge is welcome and a relief to farmers.

The east African nation, whose high-quality coffee beans are sought by roasters to blend with beans from other producers, exports much of its crop through the NCE and the rest sold by growers to foreign buyers.

Uncertainty over the performance of the crop in leading producer Brazil following a prolonged drought has helped prop up global prices of the commodity, said

QUALITY CROP

Brazil grows about 40 per cent of the world’s arabica bean, which is the backbone of most commercial coffee blends. “We also had relatively good quality crop in the market and that helped strengthen prices,” Mbithi said. Officials at the NCE said 671,438 60-kg bags were sold in the 2013/14 season that runs October to September compared to 625,185 the previous year. The average price at the exchange climbed to $212.70 per 50-kg bag from $166.70 the previous year.

Kenya had forecast that coffee export earnings would dip this season, but the drought in Brazil later provided unexpected support for prices.