Coffee Auctions Continue on Fortnightly Schedule

Today's coffee auction would still not be happening yet. The auctions are scheduled to happen on weekly basis but due to low volumes received at the Exchange, next sale has been pushed to 1st October,2019. 

Unfavorable weather has caused the slow drying of coffee causing the coffee auctions to be scheduled fortnightly.

This has also caused a notable demand of coffee available by buyers increasing prices slightly as seen from previous auctions.

Coffee up 14pc after hitting bottom

The price of Kenyan coffee rebounded this week after declining to the lowest point year-to-date in the previous trading.

A market report by the Nairobi Coffee Exchange (NCE) indicates that a 50-kilogramme bag of coffee fetched Sh8,800 this week up from Sh7,700 last week, representing a 14.2 percent. The marginal improvement is attributed to improved quality of beans this week compared with the previous sale.

The trading also saw Kenya’s premium coffee grade AA maintain the same value this week at Sh10,100, the same price it fetched last week.

Low quality coupled with depressed international prices of the commodity in the world market has been pushing down the value of coffee at the auction in the last two months.

The price of coffee in the world market has gone below 90 cents per pound this week from a high of 113 in November.

Kenya exports about 95 per cent of the coffee produced locally, making it vulnerable to price volatility.

NCE Upgrades Auction System

Auction System Automation

In April 1998 the coffee bidding process was automated and it changed from the commonly known open-outcry to the push buttons, which has continued until now. This first phase of automating the auction process of the Nairobi Coffee Exchange has served for 20 years to-date! This is commendable system performance as an instrument for the price discovery of the country’s coffee sales.

The upgraded system

The upgraded auction system was successfully taken into service at the beginning of May 2018. The system has a state-of-the-art software and the latest LED technology. This whole development offers coffee growers and buyers the necessary guarantee for a transparent, accurate and reliable sales platform which can stimulate growth in the entire coffee sub-sector.

Coffee futures jump, as export tumble fuels supply fears

Coffee futures staged a strong start to September, attempting in New York to record their second highest close in more than a year, as data showing a slump in world exports crystallised concerns of tighter supplies.

 

Arabica coffee futures for December stood up 3.8% at 153.65 cents a pound in late deals in New York, a level which, if held to the close, would represent the strong finish for the contract, bar one, since May last year.

 

'Bullish as anything'

The gains were attributed in part to technical factors, with daily and, in particular weekly, charts on arabica deemed supportive to price.

"The weekly chart is bullish as anything. It is something to get excited about," Jack Scoville, at US broker Price Futures, told Agrimoney.com.

He also flagged talk of growing talk that a series of frosts in Brazil had wrought more damage on trees than originally thought - boding ill for prospects for a 2017 harvest which was already expected in arabicas to fall below this year's, given the country's cycle of alternate higher and lower producing years.

Most producers in major arabica-growing areas "talk of losses and that trade estimates are overstated", Mr Scoville said, adding that while "the industry has estimated the crop as high as 55m bags, but there are many doubters about this estimate.

 

"Some now talk of production for all of Brazil well below 50m bags," he said, noting talk of some plantations suffering notable frost damage.

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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!

 See the Market Report.....

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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