Tag: Nairobi Coffee Exchange

Nairobi Coffee Exchange has announced plans to enhance its revenue from various services in a bid to cushion itself from fluctuating global prices.

Through its 2026-2030 strategic plan, the exchange intends to diversify its revenue streams by increasing membership fees, introducing additional services such as market intelligence, and availing new trading platforms.

NCE plans to increase revenue from auction fees by 20pc annually by 2030, charge annual membership fees, auction commissions and other services.

This revenue diversification strategy is expected to help NCE raise its non-auction revenue to 40pc of total income by 2030.

According to NCE, additional revenue from alternative sources will help stabilize its finances in the event of fluctuations in  global coffee market owing to change in demand, global supply chain disruptions, weather events, and geopolitical instability.

Speaking during the launch, NCE Chairman Kenneth Gitonga said the exchange is also targeting to enhance its investment in technology to automate most of its transactions.

“We are going to give information real time. We are really investing in technology to ensure that farmers can follow their coffee, buyers can also trace where their coffee is coming from and ensure a smooth flow. so we want to position Kenya as the main market for the region,” said Kenneth Gitonga, NCE Chairman.

Latest data by the Kenya National Bureau of Statistics (KNBS) indicate that last year, NCE coffee auction sales topped Ksh 38.7 billion with a total of  41,561.91 metric tonnes of coffee traded.

“I would attribute that to more efficiency at production level, more information to support farmers to make business decision in the processes as well as a better system for distribution of the resource through the Direct Settlement System,” said Lisper Ndungu, NCE Chief Executive Officer.

NCE also plans to offer buyers and traders market analysis, trading tools, or enhanced data insights through subscription fee, introduce fees for digital processing of transactions, including payments and settlements, through its Direct Settlement Scheme (DSS) and other digital platforms.

Currently, a buyer pay an entry fee of Ksh 50,000 per year while new broker pays Ksh 75,000 per year to participate in the auction. Coffee growers are also required to pay an annual fee of Ksh 20,000.

With the 2024/2025 coffee year nearing its end, a total of 14, 386 bags of coffee weighing 891,932 kilograms were traded at Nairobi Coffee Exchange (NCE) auction this week generating revenue amounting to Ksh 850 million.

Average price per bag of 50 kilograms attained in the auction conducted at Ukulima House in Nairobi was Ksh 47,685, a drop of 14pc compared to last week’s average price of Ksh 55,567.

In the 41^st sale of the current coffee year, premium AA grade commanded top prices while lower grades such as UG attracted lowest bids.

Eight cooperatives achieved exceptional prices above Ksh 64, 613 per bag for their AA grade coffee.

Leading the group was Gachuiro Farmers’ Cooperative Society (FCS) from Nyeri County, which fetched the auction’s highest price of Ksh 68, 360 for each of 19 bags of grade AA coffee.

Other cooperatives that attained better prices for their grade AA coffee include, Kiama of Nyeri County which sold 13 bags at Ksh 67, 456 per bag and Uchuga FCS with 15 bags that fetched Ksh 66,164 per bag.

Fifteen brokers participated in the auction with Alliance Berries Ltd leading the market after trading 4,463 bags at an average of Ksh 50, 010 per bag. Kirinya Slopes Coffee Brokerage Co.Ltd traded 1,850 bags at an average of Ksh 47,555 per bag.

New KPCU sold 1,752 generating an average price of Ksh 47,550 per bag while Minnesota Coffee Marketers Ltd sold 1,324 bags at an average of Ksh 46,392.

According to an NCE report, five leading dealers purchased 80pc of the coffee volume presented for auction.

Kenyacof Ltd bought 3,126 bags equivalent to 20.5pc of total volume at Ksh 175.2 million, Ibero Kenya Ltd purchased 3,002 bags at Ksh 162.4 million, C.Dormans SEZ Ltd spent Ksh 158.5 million on 2,494 bags of coffee and Taylor Winch Coffee Ltd got 1,874 bags at Ksh 104.6 million.

The last auction for the current coffee year is expected to be conducted on Tuesday next week with various stakeholders toasting better prices which have been realized in the 2024/2025 season.

A Murang’a coffee farmer, Peter Gikonyo told KNA that NCE auction has been registering impressive prices in the coffee year 2024/2025 which commenced in October last year.

Gikonyo said various cooperative societies have supported farmers to produce high quality coffee thus attracting international buyers.

He attributed the impressive prices to improved quality of cherry being auctioned, urging farmers to focus on increased production and quality.

“Better coffee quality usually fetches high prices as international buyers flock to the auction. It’s a challenge to us farmers to ensure we produce high quality coffee as well as increase the volumes,” Gikonyo remarked.