By Henry Kinyua
Welcome to this weeks’ edition of The HK Coffee Market Summary: Sale number 17
The coffee season 2023/2024 sales 17 took place on Tuesday 20th February 2024 at the usual place 2nd floor Wakulima house along Haile Selassie Avenue where Nairobi Coffee Exchange is located and online platforms.
A total of 22,260 bags (each 50kgs) of coffee were traded, signifying an 18% decrease from the 27,046 bags traded in Sale Number 16 last week. The average price also decreased marginally to $244 from the previous $248 per 50kg bag in Sale Number 16. This average price is equivalent to Kshs 108 per kilo of cherry.
The highest price achieved was $600 per 50kg bag from Gichathaini wet mill (Factory) in Nyeri county.
This high price is equivalent to Kshs 269 per kilogram of cherry at factory gate. An interesting and encouraging trend is emerging from this market where the number of bags receiving more than $400 per bags is increasing.
Last week 7% of volumes traded fetched more than $400 per bag. In this sale, 1265 bags or 6% of volumes traded fetched more than $400 per bag. In the previous years’ the number of bags fetching more than $400 was constant at 2% and that was not consistent with normal market behaviors.
The top 10 coffee lots were from factories in the counties of Nyeri, Embu, Murang’a and Kirinyaga. These include: Gichathaini and Gatina from Nyeri, Kagumoini and Murarandia from Murang’a, Kieni from Embu County and Kabumbu Estate and Kii, from Kīrīnyaga County.
The total earnings from Sale Number 17 amounted to $6,688,800.40 or approximately Kshs 977million. Notably, 15,358 bags, or 69% of the volumes traded, were grades AA and AB. Kindly note that an increase in the percentage of high grades leads to an increase in the average price and total earnings from the market.
The new kid on the block in coffee trading, Alliance Berries, continued to make their presence felt. They traded 4,236 bags that which were the second highest volumes traded and the coffee received the highest average price for the day which is $290 per 50kg Bag. They traded coffee from all counties and their top 10 Lots were among those that attracted the highest prices per bag. Coffee was also bought by multiple buyers.
I would like to state as always that a report on a single sale doesn’t reflect the total sales and returns from any factory, cooperative or county. Coffee is processed and traded at different times, and factories present coffee to the market in multiple sales before determining the final price paid for all their traded coffee. Therefore, one sale or even a couple of sales only serve as directional indicators of market performance. To estimate the price per kg of cherry from market reports, take the highest price paid per bag (e.g., $600) and multiply it by the dollar rate (e.g., 146). Then, divide by 50 (50kg per bag) and further divide by 6.5 to get the kilos of cherry. Using this formula: (600 * 146) / 50 / 6.5 = 269. So, $600 per bag = $12 per Kg of clean coffee, equivalent to Kshs 269 per kg of cherry
Brokers
Nine brokers/agents presented their clients’/farmers’ coffee for trading at the auction. Kirinyaga Slopes led the pack with 6,382 bags at an average price of $259, Alliance Berries were second with 4,236 Bags at an average price of $290. New KPCU presented 3,917 bags at an average price of $222 per bag. Meru County Coffee Marketing Agency Limited returned to the auction trading 1,043 bags at an average price of $233.
From the Rift Valley and Western regions, we had Kipkelion with 1085 bags at an average price of $193, Bungoma Union Marketing Agency with 388 bags at an average price of $223 per bag. Kinya coffee marketing agency that traded coffees largely from Kisii region also presented 2,455 bags at an average price of $162.
Coffee Buyers
A total of 24 buyers participated in the auction. The top six buyers, led by Kenyacof purchased 90% of the coffee presented. Others included Ibero Kenya, C.Dormans, Louis Drefus Company, Sasini (K)Limited and Taylor Winch. Sindiswa (K) Ltd procured 10 bags that was the least volume procured by one buyer from the auction.
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