The price of raw coffee beans in Kenya rises by 15%!

It is reported that the Nairobi Coffee Exchange in Kenya (NCE) recently reopened after a brief closure, but in the latest coffee auction, coffee prices are much higher than before the closure.

According to the auction results released by the Nairobi Coffee Exchange in Kenya, the price of raw beans for Kenyan AA coffee was $275 per bag (50 kg per bag), or about $5.50 per bag, up 15 per cent from the previous $239 per bag. The price of raw beans for AB coffee was US $236, or about US $4.72kg, up 1.29% from the previous US $233per bag.

It is understood that "AA" and "AB" whether Kenyan coffee is sold by itself or sold out, will use the same grading system. Grading is based on the size and quality of coffee beans as indicators, there are clear provisions, divided into AA+, AA, AB, PB, C, E, TT, T, strict classification can ensure the quality of coffee beans.

Due to the rise in prices, the total transaction price of the coffee auction was 5.5 million US dollars, up from 4.8 million US dollars last time. The price increases are all due to the fact that the Kenyan government has been promoting the reform of the coffee industry in recent years to increase the income of farmers by eliminating some intermediaries, so changes in international prices will have a direct impact on local crop production. Although it is beneficial to the income of producers, it also brings some negative effects.

All because there are many obstacles to the post-harvest treatment of coffee berries in the supply chain. In the process of reform, the government closed some coffee processing plants that could not determine the new business license, resulting in a serious shortage of production capacity in post-harvest processing of coffee berries, resulting in a decline in output and quality. Even with the current rise in prices, earnings from coffee exports have fallen by 11.38%.

In addition, the price increase is also due to a decrease in coffee production in Kenya, following news that coffee production was affected by limited funding for the Kenya Coffee Research Institute (CRI) and a chronic shortage of certified planting materials, which hindered the establishment of new coffee plantations and limited access for farmers to input and extension support.

And the monkeypox epidemic has an impact on this, according to reports, this monkeypox epidemic fatality rate is higher. Thirteen countries in Africa have reported cases of monkeypox, and Kenya is no exception. As means of transport, containers, goods and goods are in danger of being contaminated, traders will reduce their choice of goods from Africa, which is also not conducive to Kenyan coffee exports.

Moreover, the new fiscal bill introduced by the Kenyan government earlier made it clear that funds would be raised in the form of additional taxes to continue to repay interest on high sovereign debt. But the move aroused public dissatisfaction. On June 25, fierce protests broke out in Nairobi, the capital of Kenya, and several cities, resulting in clashes between people and police, resulting in many deaths, but the protests have not yet subsided.

Even Kenyan President Ruto has taken a series of measures to reassure the people, including repealing several tax increases in the new bill and removing the cabinet. However, there is still a lot of public dissatisfaction with the government's intention to continue to increase some taxes, which it says are necessary to fill the treasury and reduce reliance on external borrowing.

At present, the Kenyan coffee industry still faces many challenges. Coffee industry insiders believe that prices may continue to rise in the future when Kenya's domestic political situation is chaotic, the development prospect of the coffee industry is uncertain, and coffee production cannot be improved.