Kenya’s Coffee Prices Dip as Global Market Rattled by Trade Tensions, Brazil Outlook

Coffee prices in Kenya have declined sharply at the latest Nairobi Coffee Exchange (NCE) auction, dropping to $296 per 50-kilogramme bag from $320 in the previous sale, as global market jitters and easing weather concerns in Brazil weigh on international prices.

The price fall mirrors trends on global commodity markets, where arabica and robusta futures touched multi-month lows this week.

Arabica fell to a two-and-a-quarter-month low on Monday, while robusta dropped to a four-month low, as escalating trade tensions raised fears over weakened consumer demand and higher retail prices due to potential tariffs.

Although Kenya exports nearly all of its coffee, mostly high-grade arabica, its small share of the global market leaves it vulnerable to international volatility.

Market analysts say concerns that higher tariffs will make coffee more expensive for consumers in key markets are depressing demand forecasts and putting downward pressure on prices.

Weather developments in Brazil, the world’s top coffee producer, have also influenced sentiment.

Recent rainfall in the key arabica-growing region of Minas Gerais has eased earlier fears of dryness, reducing speculative pressure on prices.

According to meteorological data, Minas Gerais received 39mm of rain last week,dampening worries about crop stress.

However, underlying supply concerns from Brazil remain.

The country’s green coffee exports in February dropped 12 year-on-year to 3 million bags, according to trade data, while crop estimates for both 2024 and 2025/26 have been revised downward.

In Kenya, the recent price dip poses a fresh challenge to farmers already facing rising costs and inconsistent earnings.

The government has introduced a series of sector reforms, including prompt payments, subsidised inputs, and new licensing regulations.

But with global trends now driving prices lower, farmers say the measures may not be enough to cushion them from falling incomes.

Industry players are urging authorities to expedite market reforms and promote local value addition to protect Kenya’s coffee earnings amid deepening international uncertainty.

gandae@businessdayafrica.org