Kenya Coffee Prices Defy Global Drop On Strong Demand
Kenya’s coffee prices held firm in the latest sale, defying a global decline driven by increased supply following a strong harvest in Brazil.
The East African nation’s Arabica prices rose to $242 per bag from $229 in the previous sale, supported by strong demand for its top-grade beans.
September Arabica coffee futures (KCU24) dropped by 8.75 cents, or 3.63 percent, while September ICE Robusta coffee futures (RMU24) fell by $121, or 2.67 percent.
Kenya exports over 95 percent of its coffee, making the country highly sensitive to fluctuations in international prices.
The current drop in global coffee prices is largely attributed to a 26 percent year-on-year increase in Brazil’s green coffee exports in July, reaching 3.4 million bags.
Further downward pressure on prices stemmed from favourable weather in Brazil, where the absence of frost spared coffee crops from potential damage. Last week, prices rallied on fears of frost that could have reduced supply.
In 2021, Kenya benefited from high international prices after severe frost in Brazil significantly impacted supply.
The Kenyan government is now pushing for coffee sector reforms aimed at boosting farmers’ earnings by cutting out intermediaries in the value chain.
By Business Day Africa.
