By Henry Kinyua
Welcome to this week’s edition of the HK Coffee Market Summary, Sale Number 28.
This week marks the 28th sale of the 2023/2024 Coffee Year, which took place on Tuesday, May 7th, 2024, inside the NCE trading floor and on online platforms. A total of 23,930 bags, or 1,465,122kg of coffee, were traded at the auction.
The value of the coffee traded amounted to approximately $5889,550, or around Ksh 795M. This represents a slight decrease from last week’s Sale 27, where 25,180 bags, or 1,545,052 kg of coffee valued at approximately $7,888,906, or around Ksh 1 billion, were traded. The average price per bag was $201 a decline from $245 that was achieved last week. Also to put it in context sale 28 last year took place on 28th May 2023 and the average price was $186 per bag.
Brokers
Nine brokers participated in the auction. Alliance Berries led by trading the highest volume—26%, followed by Kirinyaga Slopes at 26%, New KPCU each at 20%, KCCE Marketing Agency Ltd at 9%, Minnesota at 7%, Kipkelion at 5%, Kinya Coffee Marketing Agency at 3%, Kiambu Coffee Marketing at 3% and Murang’a County Coffee Dealers at 2%.
The average price per bag was $201, a decrease from $245 last week. Alliance Berries achieved the highest average price at $218, followed by Kiambu Coffee Marketing at 213. Kinya Coffee Marketing Agency Ltd had the lowest average price at $171 per bag.
The highest price paid for coffee was $358 per 50 kg bag, or $7.16 per kg, a drop from $404 per bag or $8.1 per kg achieved last week. This is equivalent to about Ksh 149 per kilo of cherry on the trading floor. This particular lot of 75 bags or 4,516 kg, grade AA from Gakuyu-ini factory a part of Thirikwa Farmers Cooperative Society in Kirinyaga County, was sold by Alliance Berries and bought by Rockbern Coffee Group Ltd.
Coffee Buyers
A total of 16 buyers participated in the auction. The top 5 buyers, led by Kenyacof, purchased 87% of the coffee presented at the auction. In the category of the least volume procured by a buyer, we had Blue Scope Shipping And Logistics (K) Ltd purchasing 5 bags or 361 kg of coffee from the auction.
On this sale, 7 bags of grade AA from Mikumbune Farmers Cooperative Society, Munani factory received a NO BID. This is where coffee presented doesn’t find an interested buyer and such coffee is withdrawn to be presented in future sales.
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., $358), 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, $358 per bag, as per this report, is equivalent to Ksh 149 per kg of Cherry on 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.
• So far most cooperatives have sold sufficient volumes enough to enable them to pay farmers.
