The value of coffee sold at Kenya's auction jumped 24 percent to $83.5 million in the half-year to March, driven by improved global prices and better quality crop, a senior official said on Monday. The east Africa nation, whose high-quality beans are sought by roasters to blend with beans from other producers, sold coffee worth $67.3 million in the first-half of the 2012/13 season that runs October to September.
"We had very impressive prices over the first-half and that reflected on the overall earnings. We anticipate this to carry on given the dynamics in the global market," Daniel Mbithi, the chief executive of the Nairobi Coffee Exchange said. Kenya exports about 90 percent of its coffee through the exchange, and the remainder is sold growers to foreign buyers directly.
"The factors playing out on the global scene show the current high prices of coffee will hold for some time," Mbithi said. Uncertainty over the performance of the crop in leading producer, Brazil following a prolonged drought, has helped prop up global prices of the commodity. Forecasts of El Nino weather conditions later this year have also lifted prices of the beans.
Officials said 324,247 60-kg bags were sold in the six months to March compared with 305,468 the previous year. The average price climbed to $211.1 per 50-kg bag compared to $180.7 in the previous year. Kenya said on February 5 it expects its coffee export earnings to dip by 3 percent in the 2013/14 season, mainly weighed down by volatility in global prices.
The Coffee Board of Kenya forecasts the east African nation will earn 18 billion Kenyan shillings from 50,000 tonnes of coffee produced in the 2013/14 season. Kenya earned around 18.5 billion Kenya shillings from exports of the commodity in 2012/13, down from 27.1 billion a year earlier. Coffee exports were at one time Kenya's leading foreign exchange earner but have slipped from a record level of 130,000 tonnes in 1987/88. Many smaller coffee farmers, disillusioned with poor earnings, switched to other crops or sold land for real estate. The area of coffee plantations in Kenya has fallen to 109,000 hectares from the average of 150,000 hectares, the regulator said.