By Henry Kinyua
Welcome to this week’s edition of the HK Market Summary, Sale Number 27.
This week marks the 27th sale of the 2023/2024 Coffee Year, which took place on Tuesday, April 30, 2024, inside the NCE trading floor and on online platforms. A total of 25,180 bags, or 1,545,052 kg of coffee, were traded at the auction. The value of the coffee traded amounted to approximately $7,577,329.90, or around Kshs 1 billion. This represents a slight decrease from last week’s Sale 26, where 26,449 bags or 1,620,930 kg of coffee valued at approximately $7,888,906, or around Ksh 1 billion, were traded.
Brokers
Nine brokers participated in the auction. Alliance Berries led by trading the highest volume at 36%, followed by Kirinyaga Slopes and New KPCU each at 21%, KCCE Marketing Agency Ltd at 10%, Kinya Coffee Marketing Agency at 5%, Kipkelion at 2%, Minnesota at 2%, Murang’a County Coffee Dealers at 2%, and Kiambu Coffee Marketing at 1%. The average price per bag was $245, a slight increase from $243 last week. Alliance Berries achieved the highest average price at $269, followed by New KPCU at $254. Kinya Coffee Marketing Agency Ltd had the lowest average price at $202 per bag.
The highest price paid for coffee was $404 per 50 kg bag, or $8.1 per kg, a drop from $455 per bag or $8.1 per kg achieved last week. This is equivalent to about Kshs 168 per kilo of cherry at the trading floor. This particular lot of 95 bags or 5,780 kg, grade AA from Konyu Factory, part of Kabare Farmers Cooperative Society in Kirinyaga County, was sold by Alliance Berries and bought by C. Dorman Ltd. Interestingly, the same factory sold 45 bags of AA at the highest price of $455 per bag last week.
Coffee Buyers
A total of 17 buyers participated in the auction. The top 5 buyers, led by Kenyacof, purchased 83% of the coffee presented at the auction. In the category of the least volume procured by a buyer, we had Faina Enterprises Ltd purchasing 4 bags and Global Mark Foods Ltd buying 10 bags.
Points to Note This Week
• To estimate the price per kg of cherry from these market reports, take the highest price paid per bag (e.g., $404), multiply it by the dollar rate (e.g., 135), divide by 50 (since it’s 50 kg per bag), and then divide by 6.5 to get the kilos of cherry. Thus, $404 per bag, as per this report, is equivalent to Ksh 168 per kg of Cherry at the trading floor. This amount is then subject to various deductions such as milling charges, brokers’ commission (2.5% of gross), handling fees, and costs for export bags.
• I would like to clarify that a report of one sale does not reflect the total sales and returns from any factory, cooperative, or county. Coffee is harvested, pulped, dried, milled, and traded at different times. Factories and estates deliver coffee to the market in multiple sales (lots) before they can compute the final price paid for all their coffee traded. Therefore, one sale, or even a couple of sales, is not enough to determine the final price to be paid to farmers, but it is a good directional indicator of how the market is performing.
