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Coffee Prices Rally, Safaricom's Money Market Fund
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Kenyan Wall Street
December 02, 2024
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What's Inside
Coffee Prices Surge to Highest in 60 Years on Supply Concerns
Coffee futures in New York have recently soared to levels not seen since 1970s, driven by growing fears over crop production in leading coffee-producing nations.
Arabica futures have soared by over 70% this year, reaching their highest levels since 1977.
The price of premium arabica coffee variety, which is commonly used for specialty brews rose due to significant supply disruptions in key markets such as Brazil and Vietnam.
Robusta, often used in instant blends and considered a more affordable option, recently hit its highest price levels since the 1970s.
A contributing factor to the price spike is the brisk pace of exports, which could lead to dwindling stockpiles by the end of the current season according to a recent report by the US Department of Agriculture’s Foreign Agricultural Service. Across the supply chain, sellers are raising prices and cutting discounts to safeguard profit margins, with additional increases likely.
Severe weather has also exacerbated the situation in major coffee-growing regions. For example, Brazil, the world’s largest producer, has been hit by prolonged droughts, affecting tree yields and potentially lowering next season’s production. Vietnam, another major supplier, has also experienced adverse weather, further tightening global supply.
Uganda, the fifth-largest exporter, is facing its own challenges. Farmers in the East African country are grappling with security concerns on farms. According to Uganda Coffee Development Authority, farm-gate prices for robusta, commonly known as “Kiboko,” have surged by nearly 70%% since the beginning of the year, reaching a record 7,000 Ugandan shillings ($1.89) per kg.
Stay updated on this and other stories on The Kenyan Wall Street.
“If all the economists were laid end to end, they’d never reach a conclusion.”
-George Bernard Shaw
Safaricom Enters the Money Market Fund Industry with Ziidi MMF
Telco giant Safaricom PLC has entered the money market fund after its subsidiary, Ziidi Money Market Fund, received a license from the Capital Markets Authority (CMA).
CMA has licensed Ziidi MMF as a Collective Investment Scheme (CIS).
It will be accessible through the MPESA-platform similar to the other Safaricom-backed Unit Trust Mali managed by Genghis Capital.
The product is a partnership by Safaricom with Standard Investment Bank, ALA Capital Limited, and Sanlam Investments East Africa Limited.
According to Wycliffe Shamiah, CMA’s CEO, the new development “underscores the commitment to foster innovation which also enables Safaricom enhance its footprint in the finance services sector.”
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