According to reports, the Nairobi Coffee Exchange (NCE) in Kenya reopened recently after a brief closure, but in the latest coffee auction, coffee prices rose sharply compared with before the closure.

According to the auction results released by the Nairobi Coffee Exchange in Kenya, the transaction price for Kenyan AA-grade green coffee beans was 275 USD per bag (50 kg per bag), about 5.5 USD per kg, up 15% from the previous 239 USD per bag. The transaction price for AB-grade green coffee beans was 236 USD, equivalent to about 4.72 USD per kg, up 1.29% from the previous 233 USD per bag.

It is understood that "AA" and "AB" are the same grading system used for Kenyan coffee whether sold domestically or exported. The grading uses coffee bean size and quality as indicators, with clear rules, and is divided into AA+, AA, AB, PB, C, E, TT, and T. Strict grading can ensure coffee bean quality.

Due to the price increase, the total transaction value of this coffee auction was 5.5 million USD, higher than the previous 4.8 million USD. The price increase is because in recent years the Kenyan government has been promoting reform of the coffee industry, increasing coffee farmers' income by eliminating some intermediary institutions, so changes in international prices will directly affect local crop production. Although it benefits producers' income, it also brings some negative effects.

This is all because in the supply chain, the post-harvest processing of coffee cherries has faced numerous obstacles. During the reform process, the government shut down a number of coffee processing plants that had not yet secured new operating licenses, causing severe insufficient capacity for post-harvest processing of coffee cherries, and ultimately leading to declines in both yield and quality. Even with the current price increase, coffee export earnings still fell by 11.38%.

In addition, the price increase is also because Kenya's coffee production has declined. Earlier reports noted that due to limited funding for the Kenya Coffee Research Institute (CRI), there has been a long-term shortage of certified planting materials, hindering the establishment of new coffee plantations, and farmers have limited access to inputs and extension support, affecting coffee production.

Moreover, the mpox outbreak has had an impact on this. According to reports, this mpox outbreak has a higher fatality rate. Thirteen countries in Africa have reported cases of mpox, and Kenya is no exception. As transportation vehicles, containers, goods and items all carry the risk of contamination, traders will reduce their purchases of goods from the African region, which is likewise detrimental to Kenya's coffee exports.

In addition, the new finance bill introduced earlier by the Kenyan government explicitly stated that funds would be raised through additional taxation in order to continue repaying the interest on its high sovereign debt. But this move sparked public discontent. On June 25, fierce protests broke out in Nairobi, Kenya's capital, and multiple cities, resulting in clashes between the public and police and multiple deaths, yet the protests have still not subsided to this day.

Even though Kenyan President Ruto took a series of measures to soothe public sentiment, including withdrawing several tax increases from the new bill and dissolving the cabinet, the government still intends to keep raising some taxes, saying taxation is necessary to fill the national treasury and reduce reliance on external borrowing. The public remains deeply dissatisfied.

At present, Kenya's coffee industry still faces many challenges. Coffee industry insiders believe that with Kenya's domestic political situation in chaos and the industry's development prospects unclear, and with coffee production unable to increase, prices may continue to rise in the future.