Kenya’s coffee prices remained resilient in the latest auction, bucking a global downtrend in the futures market as a result of increased supply following a strong harvest in Brazil.
Arabica coffee prices came under slight pressure this week after projections indicated that global 2024/25 coffee production would climb by +2.2 percent year on year to 174 million bags.
The East African nation’s Arabica prices rose to $245 per 50-kilo bag this week from $239 in the previous sale, supported by strong demand for its top-grade beans.
December Arabica coffee futures dropped by 0.04 percent, pushing down the value. Arabica forms Kenya’s largest coffee variety of which 95 percent is sold to the global market.
These large export volumes make the country highly sensitive to fluctuations in international prices.
The current drop in global coffee prices is largely attributed to a 26 percent year-on-year increase in Brazil’s green coffee exports in July, reaching 3.4 million bags.
Further downward pressure on prices stemmed from favourable weather in Brazil, where the absence of frost spared coffee crops from potential damage. Previously, the prices rallied on fears of frost that could have reduced supply.
In 2021, Kenya benefited from high international prices after severe frost in Brazil significantly impacted supply.
The Kenyan government is now pushing for coffee sector reforms aimed at boosting farmers’ earnings by cutting out intermediaries in the value chain.
