By Henry Kinyua
Welcome to this week’s edition of the HK Coffee Market Summary for Sale Number 29.
This week marks the 29th sale of the 2023/2024 Coffee Year, which occurred on Tuesday, May 14, 2024, at the NCE trading floor and online platforms.
A total of 21,867 bags, or 1,347,092 kg of coffee, were traded at the auction. The coffee traded totalled approximately $5,213,711.12 or around Kshs. 678M, representing a slight decrease from last week’s Sale 28, where 23,930 bags or 1,465,122 kg of coffee were traded. The value then was approximately $5,889,550, or around Ksh.
The average price per bag was $193.52, a decline from the $201 achieved last week. For comparison, Sale 29 last year occurred on May 29, 2023, with 11,927 bags traded at an average price of $168 per bag. In the 2019/2020 season, Sale 29 took place on September 1, 2020, with 10,332 bags sold at an average price of $231.
Brokers
Twelve brokers participated in this auction. Kirinyaga Slopes traded the highest volume, accounting for 29%, followed by Alliance Berries at 25%, and New KPCU at 20%. KCCE Marketing Agency Ltd traded 6%, Kipkelion 4%, and Mt. Elgon, Minnesota, Kinya Coffee Marketing Agency, Kiambu Coffee Marketing, Murang’a County Coffee Dealers, and Baringo Kawa each traded 2%. The average price per bag was $201, a decrease from $245 last week.
New KPCU achieved the highest average price at $211, followed by Murang’a County Coffee Dealers at $209. Mt. Elgon Coffee Marketing Agency had the lowest average price at $171 per bag.
The highest price paid for coffee was $307 per 50 kg bag, or $6.14 per kg, a drop from $355 per bag or $7.16 per kg achieved last week. This is equivalent to about Kshs. 122 per kilo of cherry on the trading floor. In this sale, only 117 bags or 7,211 kg of coffee fetched more than $300 per bag from Kiburi, Kanjahi, Kiandino, and Muririnja Factories and were purchased by Kenyacof and C.Dorman Ltd.
Buyers
19 buyers participated in the auction, with the top 6, led by C. Dormans, purchasing 78% of the coffee presented. In the category of the least volume procured by a buyer, Faina Enterprises Ltd purchased 8 bags or 533 kg of coffee.
Points to Note This Week:
1. To estimate the price per kg of cherry from these market reports, take the highest price paid per bag (e.g., $307), multiply it by the dollar rate (e.g., 130), divide by 50 (since it’s 50 kg per bag), and then divide by 6.5 to calculate the kilos of cherry. Thus, $307 per bag, as per this report, is equivalent to Ksh 122 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 the gross), handling fees, and costs for export bags.
2. It’s important 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.
3. Most cooperatives have sold sufficient volumes to enable them to pay farmers.
